Santa Clara County Housing Task Force, "Putting it all together"
SANTA CLARA COUNTY HOUSING
TASK FORCE
"PUTTING IT ALL TOGETHER"
November 27,2001
SANTA CLARA COUNTY HOUSING TASK FORCE:
CONTENTS
SECTION I
ACKNOWLEDGEMENTS
SECTION II
EXECUTIVE SUMMARY
SECTION III
RECOMMENDATIONS
SECTION IV
A VISION
SECTION V
A CALL TO ACTION
SECTION VI
A PROCESS
SECTION VII
THE TOUR WORK GROUPS"
REPORTS/MINUTES
1. COMMUNITY LAND TRUST
2. GOVERNMENT SURPLUS LAND
3. PUBLIC EMPLOYEES HOUSING
ASSISTANCE
4. SPECIAL NEEDS HOUSING
SECTION VIII
REGIONAL HOUSING ACTION PLAN
(RHAP)COMMITTEE
1. RHAP COMMITTEE: RESEARCH PHASE
a. HOUSING NEED
b. HOUSING BROADLY DEFINED
c. HOUSING AND OTHER REGIONAL
ISSUES
d. AFFORDABLE HOUSING
2. RHAP COMMITTEE: STRATEGY PHASE
SECTION IX
IMPLEMENTATION RECOMMENDATIONS
1
SECTION X
APPENDIX: ADDITIONAL RESEARCH AND
COMMENTS PROVIDED BY PARTICIPANTS
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION!
ACKNOWLEDGEMENTS
Housing Task Force
The Housing Task Force has brought together a unique and qualified group
of our housing community. Listed below is just a partial list of those who
have supported our efforts and who have dedicated many hours of hard work
to this process.
ACORN
Affordable Housing Network
Alliance for Community Care
American Red Cross
ATU-Local 265
Catholic Charities
Cambrian School District
CHAM
City ofSan Jose
City of Milpitas
Fremont Union High School District
Housing Authority ofSanta Clara County
Immigrant Action Network
Innvision
Los Gatos Union School District
Oak Grove School District
PACT
Project Match
San Jose Unified School District
Santa Clara County Department ofDrugs and Alcohol
Santa Clara County Department of Mental Health
Santa Clara County Employee Services Agency
Santa Clara County Foster Care Service
Santa Clara County General Services Agency
Santa Clara County Housing and Community Development Program
Santa Clara Coimty Planning Department
Santa Clara County Public Guardians Office
Santa Clara County Social Services Agency
Santa Clara Unified School District
Santa Clara Coimty Association ofRealtors
SEIU 715
Silicon Valley Manufacturing Group
Silicon Valley Independent Center
St. Joseph's Cathedral
Town ofLos Gatos
Tri-County Apartment Association
Valley Transportation Agency
Working Partnerships USA
Alyson Abramowitz
Cindy Amado
Bill Amopp
John, Moore
Bonnie Bamburg
Roger Barnes
Allison Bamett, Office of Assemblymember John Dutra
Chris Block
Larry Boales
Courtney Bober
Bob Brownstein
Sheri Bums
Christine Burroughs
Bob Campell,
Candi Capogrossi
Izi Chan
Tracey Chew
Charlie Chew
Consuelo Collard
Chuck Corr
Trish Crowder
Sandy Decker, Town ofLos Gatos
Jane Decker
Barry Del Buono
JeffDennison
Bob Dougherty
Ann Draper
Mike Eaton
Rebecca Elliot
Michael Elliot
Yolana Engiles
Betty Feldheym
Vivian Frelix-Hart
John Erkman
Kathy Espinoza-Howard
Tom Fink
Nancy Fowler
Amy Glad
Steve Glickman, Town of Los Gatos
Margaret Gregg
Poncho Guevara
Corky Gutierrez
Lydia Grybos
Jeffrey Hare
Art Henriquez
Maiy Hughes
Ron Johnson
Melina Jovanovic
Diana Kalcic
Dennis Kennedy, City of Morgan Hill
Kristie Kesel
Naphtali Knox
MarkLazzarini
Will Lightboume
Gene Longinetti
Bill McWood
Lisa Merlin
Sharon Miller
Dennis Mills
Frank Motta
DuniaNoel
John Ordonex
Rex Painter
Marcel Pajuelo-Schwartz
Andrea Papanasmassiou
Christy Paul
Sandy Peny
Steve Phillips
Mary Reed
Bob Reid, Office of Assemblymember Manny Diaz
Felix Reliford
Julie Render
Louie Rocha
Maria Romero-Aranda
Alex Sanchez
Denise Scovel
Kristy Sermershiem
Barbara Sema
Edith Sona
Steve Speno
Ben Spero
Paul Stewart
Neil Struthers
Kathy Thibodeaux
Greg Tomkins
Ray Villarreal
Saul Wachter
Billie Wachter
Phyllis Ward
Mike Weinstein
Gertrude Welch
Jim Weston, Office of Senator John Vasconcellos
Heidi Wolf-Reid
Dan Wu
Paul Wysocki
Richard ZaVala
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION II
EXECUTIVE SUMMARY
SANTA CLARA COUNTY HOUSING TASK FORCE REPORT
FORWARD
It is with a great deal of gratitude and satisfaction that I submit this report to the Board of
Supervisors(BOS)on behalf ofthe Santa Clara Coimty Housing Task Force(HTF). My thanks
go first to BOS Chair Beall for allowing me the opportunity to serve as HTF Project Director.
This project has been an enlightening and challenging experience, and I am humbled by the level
ofknowledge, capacity and dedication 1 have observed in the dozens ofpeople 1 encountered
along the way.
1 also owe a speciaLdeht to Caroline Judy and Jean Cohen ofSup. Beall's ofSee for their tireless
effort over many,many long hours; to County Executive Richard Wittenberg,for his willingness
to consider our proposal in the face of a looming fiscal crisis; to Interim Housing Coordinator
Ray Villareal, for his devotion to the process while shepherding the four HTF Work groups
imder his supervision; and to the Steering Committee members who guided their groups: Chris
Block and Poncho Guevarra ofthe Housing Trust of Santa Clara County,for the Regional
Housing Action Plan Committee; Alex Sanchez,Executive Director ofthe Housing Authority,
and Bonnie Bamburg,Director ofNew Development for Community Housing Developers,for
the Government Surplus Land Committee; Will Lightboume, Director ofSCC Social Services
Agency, and Frank Motta,Program Officer for Corporation for Supportive Housing,for the
Special Needs Housing Committee; and Roger Barnes, Director ofEducation Partnerships for
Santa Clara Unified School District, and Kristy Sermersheim, Executive Secretary-Vice
President ofSEIU Local 715 for the Public Service Employee Housing Assistance Committee.
Countless other county stafffrom various departments also contributed time, expertise, and
support as well.
Regarding the report, let me be clear that 1 am not the author, nor even the editor. My role
during this phase of work has been that ofa part-time director, overseeing and compiling work
and information created in countless meetings, and reviewing hundreds of pages ofdocuments.
Let me also add praise for my colleague, Susan Silveira, who performed a valuable function by
reading and synthesizing rnorc than 26 reports produced by other groups that served as a basis
for the work ofthe Regional Housing Action Plan Committee, one ofthe five HTF Work
Groups. In addition, Ms. SUvcira helped to review,compile and collate the contents ofthis
report.
In addition, let me also point out that this document is not intended to he a "final report." The
work that has just been completed is, in fact, simply the first phase of a lengthier project. Many
ofus recognized early on that achieving the identified goals ofthe various committees would
require more discussion, additional participation by interested parties, and time to achieve
consensus among the cities, school districts, and other jurisdictions in the county. The
recommendations contained herein will require additional scrutiny and disctission, as well as
consideration ofimplementation aspects, including fiscal impacts. This document serves to
inform all readers ofthe scope and nature ofthe work,as well as ofthe basis for eventual
recommendations.
However,it is also extremely important to note that this document covers the very intensive and
comprehensive processjust completed,and that its "update" status is not meant to sell it short. A
great deal ofresearch and analvsis was conducted during this phase. And supplemental research
on certain aspects ofthe housing crisis continues. (Some ofthat newer research is included in
this document, albeit in somewhat raw form). I urge the reader, and subsequent Steering
Committee convenors to make use ofthis valuabje information. Other groups and efforts, too,
may find this data useful.
In fact, local State Assemblymember Manny Diaz has recently convened a Select Comrmttee on
Silicon Valley Housing,appointing many to his committee who have also sensed on the HTF.
We have encouraged Assemblymember Diaz to make use ofsome ofthe HTF work. In a
hearing convened in November, Assemblymember Diaz and several of his Assembly colleagues
along with representatives from State housing agencies heard about the HTF process, and voiced
great interest in the regional aspects ofit
Finally, let me state my fervent hope that the BOS will endorse this report, vyithout discussing
the numerous recommendations. This is not the appropriate time to consider specific
recommendations, other than those noted in Sup. BeJill's tr^smittal memo. However,the work
ofcreating housing affordable to all Santa Clara County residents is far from finished; we
encourage the BOS to lend its support, and to promote the leveraging potential that a regional
housing effort could produce.
Thank you for this opportunity to be ofservice.
Respectfully submitted.
Paul A. Wysocki
November 26,2001
SANTA CLARA COUNTY HOUSING TASK FORCE
REPORT SUMMARY
INTRODUCTION
It has been the mission of the Housing Task Force to thrust the Comty into a new public leadership
role as "the countymde affordable housing champion." Consideration ofjurisdiction, protocol and
tradition were recognized and respected, hut the severily ofthe crisis and die lack of comprehensive,
compelling solutions inspired committee members and took precedence above aU else. The prevailing
sentiment has been that, vfiile the region'sjurisdictions have done many things to address the housing
crisis; it has not been enough, and it is time to coordinate land use and housing decisions with the
greater interests ofthe region.
Housing advocates see the Housing Task Force process as an opportunity to create a countywide
affordable housing "champion." Others see opportunities for the County to fill several major regional
policy and planning deficiencies, ■vsiiile some see the County becoming more vocal at the state and
federal levels. All however, envision groundbreaking policy that unites all jurisdictions, public
institutions and agencies into a synergistic effort to mitigate the housing crisis.
THE HOUSING TASK FORCE PROCESS
The Housing Task Force (HTF) was created by Supervisor Beall in his State of the County address in
January, 2001. After several months of planning by a Steering Committee, the HTF first met on May
17, 2001 and was comprised of over 150 professional, volunteer housing advocates, developers,
service providers, city and county housing staff and elected officials. All areas of the county and all
affordable housing interests were represented. The HTF was divided into 5 subcommittees; 1)
Regional Housing Blueprint; 2) Special Needs Housing; 3) Public Employee Housing Assistance; 4)
Government Surplus Land; and 5) Community Land Trust. Four committees met approximately
every two-three weeks from late May through August, while the Countywide Housing Blueprint
Subcommittee met until mid September.
Each Subcommittee was advised of the time constraints of the process, and recognized their work was
limited to developing broad policy and strategy recommendations that would be refined later. Within
their subject area, the Subcommittees conducted the following analysis:
Define the affordable housing problem and needs
Identify barriers to affordable housing, especially in Santa Clara County
Identify key stakeholders in affordable housing and resources
Develop strategies using short, medium, and long term goals
Objectives must be focused
Recognize/redefine the County's role in housing production, creation, and preservation
Recogiuze the work of others and if possible, build upon that
SCCHTF Summaiy to BOS
Dated 11^9/01
As work ofthe Subcommittees progressed, policy and strategy recommendations initially focused on
the specific concerns ofthe group, but quicldy grew into far-reaching recommendations. Many ofthe
recommendations overlap and most are still in a very rough form,because again,the process and time
constraints did not lend itselfto developing a refined product. It is, however,the intention ofthe
Steering Committee that the recommendations will be reworked and fiirther developed through a
"transition period".
STRATEGY AND POLICY RECOMMENDATIONS
This summary briefly groups the major recommendations of the Subcommittees by overall project
objectives diat the Steering Committee intends to accomplish during the 'transition phase." The
overall project objectives as formulated by the Steering Committee are as follows:
1) Regional Leadership and Advocacy
2) Infrastructure and Organization
3) Acquisition and Allocation ofResources
L Regional Leadership and Advocate
1) The Board of Supervisors should adopt a resolution declaring a "State of Affordable
Housing Emei^eney" and announce a number of major action steps to be taken along
many fronts. Possible action steps may include but are not limited to the following and
the &al resolution has not yet been approved by the Steering Committee.
2) In partnership with local jurisdictions and institutions, the County should establish a
countywide Housing Advisory Commission (HAC) for planning and implementing a
regional housing action plan. Key issues the regional forum will address include:
•
•
•
•
The use ofpublicly owned surplus land for affordable housing
Creating affordable housing opportunities for all public employees
Creating affordable housing opportunities for special needs persons and families
Developing comprehensive, consistent favorable land use and affordable housing
policies throughout the county
• Addressing the jobs/housing imbalance in the county
3) In partnership with local public jurisdictions and institutions the County should initiate a
countywide Housing Education and Finance Assistance Program for all public employees.
• This multi-jurisdictional program will establish a revolving loan program and
provide rental and home buying assistance to pubUc employees in Santa Clara
Coimty.
SCCHTF Summary to BOS
Dated 11/29/01
4) The County should take a proactive, local leadership role becoming the affordable
housing advocate tihroughout the county. In this capacity, the County should facilitate
the following:
• Bringing together developers, service providers, city, state and federal agencies
and resources for the purpose ofdeveloping affordable housing projects
• Advocate for favorable land use policies and set asides for affordable housing
developments
• Advocate for cities to allocate 50% of their redevelopment funds to affordable
housing
• Further develop existing lobbying resources
5) The County should become an active and visible advocate at the state and federal levels of
government. The County should work for the following:
• Prepare an analysis of how state and federal housing programs in die county work
or do not work here
• Advocate for fiinds, tax incentives and programs (i.e.. National Housing Trust)
aimed at developing affordable housing in high cost counties throughout the state
• Advocate(on behalf oflocal nonprofits and service providers) developing flexible
conditions and consistent reporting requirements on the use of state and federal
funds for affordable housing
• Advocate for Housing Element reforms
• Advocate for construction defect legislation
• Encourage our state delegation to lead a large-scale effort to review and reform
state licensing requirements and code
• Advocate for legislation establishing Housing Redevelopment Zones
• Advocate for reform ofProposition 13 and its many variants
n.Infrastnictiire and Organization
i
1) The County should redefine vhat constitutes surplus land and compile an inventory of all
vacant or surplus land owned by local, state and federal governments, institutions and
agencies in the county.
2) The County should create an Affordable Housing Unit to coordinate the development of
new County housing service efforts, as well as support existing efforts, including but not
limited to the following:
• Facilitate coordination ofcurrent housing efforts ofCounty departments
• Gather critical data and determine housing needs of County special needs clients
and public employees
• Establish affordable housing information services (Housing Education Assistance
Program)for special needs clients and public employees
• Seek and acquire new resources
SCCHTP'Summaiy to BOS
Dated 11/29/01
• Provide resource acquisition assistance to developers and service providers
• Use County resources to facilitate local projects
• Develop marketing strategies and materials directed towards the county in support
ofaffordable housing
• Advocate for affordable housing issues at the local, state and federal levels of
government
3) The County diould establish a Special Needs Housing Education and Assistance program
for special needs clients and housing service providers.
• Services provided by the County would include ongoing rental and down payment
assistance, as well as emergency assistance and life skills training.
4) The County should establish "best practices" policies in Special Needs Housing
managernent,including;
• Developing ways to encourage and reward successful programs
• Facihtating the development of new community based special needs housing
models and developing innovative designs that would be effective in Santa Clara
County
5) The County should establish a County Housing Department for building very low and
extremely low-income housing for special needs clients and public employees. The
County Housing Department should:
Issue building permits for affordable housing projects on County surplus lands
Work with cities on building affordable housing projects on County
unincorporated lands
Become an insurer or guarantor offinancing for affordable housing projects
Establish a temporary loan fimd for developers of affordable housing projects
Establish a rental housing assistance program to buy down rents
Utilize and/or leverage service contracts to facilitate the development ofaffordable
housing
Provide "catalyst financing" to assist nonprofit developers
nL Resources Acquisition and Allocation
1) The County should move immediately to initiate the establishment of a countywide
"Affordable Housing Land Bank"(AHLB), to hold and manage "gifted" or purchased
lands for the purpose ofdeveloping affordable housing.
2) The County should make available all vacant or surplus lands owned by the County to the
Affordable Housing Land Bank and urge all public jurisdictions, institutions and agmcies
in Santa Clara Coimty to do the sanie.
SCCHTF Sununary to BOS
Dated 11/29/01
3) The County Housing Department diould be engaged in an on going effort to acquire
resources including permanent ftmding for countywide affordable bousing programs.
Potential new resources and fimding could include but not be limited to the following:
Surplus Government Land for building affordable bousing units
Units/Land acquired through Inclusionary Zoning, Density Bonuses
Special Tax districts
Bond Financing
Housing development/Commercial development fees
Local taxes
Local foundations
Pension Funds
Redevelopment Funds
Additional state and federal assistance
CONCLUSION
The Housing Task Force Steering Committee is recommending the Board of Supervisors ^point the
Steering Committee to oversee the refinement and implementation of the recommendations of the
Housing Task Force report. The Steering Committee will report to the Board of Supervisors and the
HLUET Committee of its progress on a regular basis as well as take (Section from the Board,
Committee, and County Administration.
SCCHTF Summaiy to BOS
Dated 11/29/01
SANTA CLARA COUNTY HOUSING
TASK FORCE
"PUTTING IT ALL TOGETHER"
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION
RECOMMENDATIONS
THE COMMUNITY LAND TRUST SUBCOMMITTEE RECOMMENDATIONS:
Short-term Recommendations:
1. Objective: The Subcommittee recommends the Board of Supervisors sponsor
the creation of a countywide,"Affordable Housing Land Bank".
A. The County should immediately assign a small working group to find an
appropriate partner to draw up the Articles ofIncorporation, file with the state,.
draft bylaws,recruit a Board ofDirectors etc., and formally establish the
"Santa Clara County Affordable Housing Land Bank"(AHLB).
B. The purpose ofthe AHLB would be to advance the development ofaffordable
housing opportunities in Santa Clara County, with special emphasis on low,
very low and extremely low-income housing.
C. The AHLB would be charged to accept, hold and admioister land,focilkies
and fimds contributed to the AHLB.
D. The AHLB would be charged to acquire and sell lands for the purpose of
giving the organization the flexibility and means to be effective developing
affordable housing opportunities.
E. The Corrnty should make the first contribution ofappropriate surplus land to
the AHLB and begin a public campaign to encourage other jurisdictions,
corporations,foundations and private individuals to do the spme.
F. The AHLB must establish broad cominunity support for its efforts to d[evelop
affordable housing by establishing partnerships between the County, Cities,
for profit and nonprofit developers, service providers and local phfianthropic
organizations.^
Mid-term Recommendations:
1. Objective: The AHLB Board of Directors should establish oi^anizational goals
and criteria for the affordable housing projects it will support.
A. Lands administered by the AHLB would be made available for development
ofaffordable housing opportunities for low, very low, and extremely low
income populations with emphasis placed on housing opportunities for the
following:
'
a. Public employees
b. Non profit service workers
c. Special Needs Populations
d. Working Poor Families
^
B. The AHLB would support those projects that offered opportunities for
homeovraership and rental housing assistance.
C. Homeownership would be available to those who earn less than 80% ofthe
area median income.
D. Rental Assistance would be available to those who earn less than 50% ofthe
area median income.
E. The AHLB would give preference to those projects that promoted the
community interests by adhering to smart growth principles.
F. The AHLB would establish other goals and criteria as needed.
Long-term Recommendations;
1. Objective: Over the long term,the AHLB must be engaged in an active
campaign of soliciting available lands throughout the county for the
development of affordable housing.
A. The following jurisdictions and private and nonprofit entities are potential
sources for donated or discoimted land that may become available to the
AHLB.
a. Local Governments
b. Cities
c. County Agencies
d. School Districts
e.
f.
g.
h.
i.
j.
Special Tax Districts- VTA,Water District, Sanitation, Open Space etc.,
State & Federal agencies
Foundations
Nonprofits
Large, local companies
Abandoned,foreclosed, derelict or distressed properties
k. Private citizens
1. Objective: Over the long term,the AHLB.must acquire a source(s) of ongoing
funding for the purpose of buying and administering lands.
A. The following potential sources offimding that may become available to the
AHLB.
a. CDBG & Home Funds
b. Housing Trust and other Foimdations
c. Other HLT)programs
d. State HCD and CHFA programs
e. Pension Fimds
f. Lenders Looking for CRA credits
g. Fannie Mae,Freddie Mac
h. Local Governments
i. City Redevelopment Agencies 20% set aside funds
j. In-lieu fees firom development
k. inclusionary zoning assets
1. passage ofa local tax for land acquisition
m. job creation linkage fees
GOVERNMENT SURPLUS LAND SUBCOMMITTEE RECOMMENDATIONS:
Short-term Recommendations
1. Objective: Develop strategies for overcoming the barriers to using government
owned surplus lands for affordable housing.
A. The Board of Supervisors should adopt a resolution deelaring a "State of Affordable
Housing Emergeney" and urging the following actions:
a. The County's intent to use all vacant or surplus lands owned by the
Coimty for the purpose ofdeveloping affordable housing;
b. All local, state and federaljurisdictions including special tax districts in
the county to join with Santa Clara County making their own surplus lands
available for the production ofaffordable housing;
c. The County will hire a consultant to compile an inventory of all vacant or
surplus land owned by local, state and federal governments in the county,
including special tax districts that also own surplus land in the county;
d. The County will establish a new process for evaluating and then deelaring
which County owned lands are considered surplus or excess land,thus,
making such lands available for affordable housing development;
e. The County strongly reafBrms its intention to follow through on its own
stated objectives in the SCC General Plans' Housing Element;
f. Our state delegation to sponsor legislation requiring localjurisdictions to
include in their Housing Elements a section, describing in detail all vacant
and "surplus lands" owned by the jurisdiction, including their intentions
for future use and timeline. The group would like to see legislation
making Santa Clara County a pilot project.
g. "Surplus Lands are vacant or under utilized lands or structures that have
not had clearly defined uses the past 5 years and do not have defined uses
over the next 5 years. Surplus lands also include "air rights" where
mixed-use developments are suitable for affordable housing projects".
B. The County should develop a countywide Affordable Housing Land Bank, outside of
County government,to hold & manage donated or purchased land for the singular
purpose ofdeveloping affordable housing.
1. The County Land Bank would seek initial fiinding from localjurisdictions,
RDA's,the Housing Trust and private and philanthropic sources.
2. All localjurisdictions and the state would make contributions to the "County
Land Bank"for the single purpose ofbuilding permanent affordable housing
developments.
3. The County Land Bank would also be empowered to purchase government
surplus lands for affordable housing developments.
4. The Land Bank would also be empowered to purchase private lands or
residential buildings for affordable housing developments or rehabilitation.
5. The County should require that the Land Bank will work in partnership with
the SCC Housing Trust, the SCC Housing Authority or a local non-profit
development corporation.
6. The County should urge jurisdictions to deposit "surplus lands" in the County
Land Bank for a specified period oftime. Ifthe surplus lands are not utilized
by the jurisdiction within the specified time,the Land Bank can either sell the
property with the proceeds going towards affordable housing, or advance the
development ofthe property into affordable housing.
7. The Land Bank should hold annual public hearings on the disposition of
jurisdictions surplus lands and there intended usage,filing a report each year
with the Board of Supervisors.
PUBLIC EMPLOYEES ASSISTANCE SUBCOMMITTEE
RECOMMENDATIONS;
Short Term Recommendations
The following objectives can be achieved in a relatively short period oftime and wiU
give the County the necessary information for crafting a program that meets the needs of
all public employees.
Objective: The County must acquire meaningful data and information regarding
the impact the housing crisis is having on the ability of public jurisdictions and
institutions to recruit and retain public employees.
•
•
•
The County should collect data on local economic trends, salary levels,
turnover rates,job vacancy rates, housing costs, caseloads and anecdotal
information to aid in identifying solutions,
The County should find out what public employees really want or need by
conducting surveys and focus group discussions.
The County should conq)are and evaluate information collected with other
similar information collected fi-om other areas.
•
The County should seek partnerships with other localjurisdictions and
agencies to contract for the research and evaluation ofthe problem
Objective:
The County should establish a countywide Housing Education
Assistance Program for all public employees.
•
•
•
•
The Program will provide information and educational services regarding:
► Home buying process
>• Rental process
► How to take advantage of existing programs
► Using transportation to maximize living decisions
The program will explore other incentives that jurisdictions are using to attract
and retain quality employees.
The program should develop a marketing program to inform potential public
employees as to why Santa Clara County is such a great place to live despite
the high cost of hoxising
The County shoiftd partner with other interested local agencies for support and
assistance
•
The County should develop at countywide Housing Services & Information
web site for public employees to access housing information and services.
Medium Term Recommendations
Once a needs assessment is completed and information is evaluated and organized in a
meaningfijl way,the County can implement the following objectives.
Objective: The County should establish and/or jpartner with existing organizations
in implementing a countywide Housing Assistance Program for public employees.
> The program will provide home purchase financial assistance including:
►
►
►
Down payment assistance
Monthly mortgage payment assistance
Closing cost assistance
► Service to help home buyers /take advantage of all available programs
► Seek support and financial assistance fi:om PERS & STRS
> The program will provide rental assistance including:
►
►
Monfiily rental assistance
Reduced move-in costs - security deposit assistance
►
Information service to locate afifordable units
►
Service to match roommates
► Seek support iahd financial assistance fi-om PERS & STRS
Objective:
'
The County should convene a countywide Housing Advisoiy
Commission made up. of elected officials and citizens whose purpose would be to
develop regional solutions to the housing crisis. The HAG would be chained to:
•
Create partnerships with other groups and jurisdictions that are working to
solve the public employee housing crisis and consolidate efforts at solving
the problem;
•
•
•
•
Work with our state and federal delegations and appropriate agencies to
provide tax incentives for public enq)loyees who live in high cost areas;
Work with om state and federal delegations and appropriate agencies to
provide tax incentives for property owners and developers to provide
afifordable housing opportunities for public employees;
Partner with local jurisdictions to efifect land use policies that result in
afifordable housing units being created;
Work to change building policies in the county to encourage the formation
of more rental and afifordable for-purchase units;
• Wotk to in^rove the transportation infi*astructure so public employees can
•
get to and from work easily, no matter where they live;
Explore the feasibility ofbuildiug employee housing outside of the county
and then provide eflScient transportation specifically for employees;
• Explore the feasibility ofincreasing the number ofmanufactured home
parks in the county;
• Develop an ongoing education campaign to build political and community
support for the development ofaffordable housing.
Long Term Recommendations
Over the long term the County should implement the following objectives towards the
development ofaffordable housing options for public employees.
Objective: The County should establish a Housing Department. One of its many
purposes would be to advance the development of affordable housing opportunities
on County surplus land or on unincorporated lands for County publie employees.
The County Housing Department would be chained to:
• Acquire existing residential structures and convert them to Coimty employee
housing;
• Explore the availability ofhousing at Moffett Field;
• Build "transitional housing" or "commute units" for public employees;
• Develop a financing methodology similar to a Credit Union or employee fimded
casualty assistance fimd;
• Provide incentives for builders to create more affordable housing units
specificalfy for public en:q)loyees;
• Encourage building affordable rental or for-purchase housing on Coimty or local
agencies owned land.
Objective: The County should develop new resources and/or funding sources for
the purpose of developing affordable housing opportunities.
Potential new
resources or funding could include but not be limited to the following:
Surplus Government Land for building affordable housing units;
Units/Land acquired through Inclusionaty Zoning,Density Bonuses;
Special Tax districts;
Bond Fiuancing;
Housing development/Commercial development fees;
Local taxes;
Local foundations;
Pension Fimds;
Additional state and federal assistance.
SPECUL NEEDS HOUSING SUBCOMMITTEE RECOMMENDATIONS;
Short Term Recommendations:
1) Objective: The County will take a proactive, local leadership role becoming the
primary advocate for developing very low and extreme^ low-income housing
throughout the county for special needs clients. The County should:
> Become a feciKtator ofdevelopments for special needs housing by
bringing together county resources, cities, developers and service
providers;
> Work towards changing local land use policies to include more special
needs housing components;
> Advocate linking local land use approvals and fimding assistance with
>
>
>
>
>
tradeoflfe benefiting affordable housing developments with appropriate
services for special needs populations;
Advocate attaching to core business functions ofthe local economy(in
lieu fees, exaction's, etc.,) the financing ofaffordable housing and/or
housing services for special needs populations;
Advocate that all government surplus lands(or proceeds from the sale
of) be dedicated to the development ofvery low and extremely lowincome housing;
Provide resource development and grant writing assistance to Coimty
agencies and housing and service providers to facilitate the
development ofmore low-income housing;
Work to ensure Community Development Block Grant fimds are
allocated to meet Coimty low-income housing objectives;
Evaluate potential revenue sources that could be used for the
development ofmore low-income housing and e5q)lore ways to
establish a permanent source offunding.
2) Objective: The County will take a proactive leadership role at the state and
federal levels of government for developing very low and extreme^ low-income
housing throughout the county for special needs clients.
> Advocate for more resources and incentives in high cost areas to
encourage the development ofvery low and extremely low-income
housing;
> Work with various local funding sources, as well as state and federal
agencies on developing flexible conditions and requirements on the
use offimds for Special Needs Housing;
> Work with various local fimding sources, as well as state and federal
agencies on developing consistent reporting requirements on the use of
fimds for Special Needs Housing;
> Request our state delegation to lead a large-scale effort to review and
reform state licensing requirements and code.
3) Objective: The Board of Supervisors will create within County government an
Affordable Housing Unit to coordinate and support new and existing County
housing service efforts, acquire new resources, gather and manage housing data
and insure all departments are working together using resources efficiently. The
County should:
> Task the housing unit to coordinate the special needs housing eflforts
undertaken by the separate agencies and departments;
> Develop the means for acquiring and managing critical data relative to
the housing needs ofspecial needs populations throughout Santa Clara
Coimty;
> Develop a standardized intake system among County agencies to
better determine the housing needs ofCoxmty clients and fecilitate
effective housing placement;
> Support the development and dissemination ofan information data
base on available units or beds for special needs individuals;
> Make County housing information easily availabte to the service
operators, developers to assist them in acquiring fimding;
> Make Coimty information available to cities and the community at
large to demonstrate the severity ofthe problems &ced by special
needs populations.
Mid-term Recommendations:
1) Objective: The County and Cities will establish a countywide Housing Advisory
Commission(HAC)as a regional forum for discussing and acting on the entire
spectrum of housing issues. The HAC should:
> Establish countywide inter-jurisdictional housing agreements for the
creation ofspecial needs housing development and/or services;
> Establish inter-County rektionships relative to special needs housing
and services issues;
> Establish a countywide Land Bank,comprised ofsurplus land and
financial contributions ofaU localjurisdictions, to be administered by
the HAC or other non profit agency,for the single purpose ofbuilding
and rehabilitating low, very low and extremely low income housing;
> Work with cities on siting appropriate special needs housing projects
on surplus gbyemment owned lands, or on County unincorporated
land;
> Work with cities on expediting development ofspecial needs housing
projects by seeking waivers or variances on LAFCO rules,
transportation services rules, density rules etc.;
> Develop countywide housing goals for special needs populations based
on needs assessments and inventory data, and advocate for regional
support to meet those goals;
> Develop a countywide Housing Action Plan to comprehensively
address the housing needs ofall Santa Clara Coimty residents, and
enlist regional sppport for the in^lementation ofthis plan.
1) Objective: The County will seek"best practices" in Special Needs Housing
management.
> To insure County agencies and clients are getting the best housing
services possible, the County should explore ways to encourage and
reward successful programs.
> The County should explore different community based special needs
'housing models to find innovative designs that would be effective in
Santa Clara County.
Long Term Recommendations:
1) Objective: The County will establish a Special Needs Housing Assistance
program for special needs clients.
> The County Special Needs Housing Assistance program should
provide fimds that service providers and special needs individuals
could utilize in the short term:
• For assistance in between housing ch^ges;
• For down payment assistance:
• For emergency rental assistance;
> The County Special Needs Housing Assistance program should
provide service operators and special needs individuals with rental and
housing information Services, including;
• available assistance programs in the County and at the state and
federal levels;
• information on available units for special needs individuals;
• rental readiness training;
• Life skills training.
4) Objective: The County will establish a Special Needs Housing Development
program for issuing permits to build very low and extremely low income housing
. with services. The Special Needs Housing Development program should:
• Issue permits for appropriate Specif Needs Housing projects on Coimty
owned land, or on County unincorporated land;
• Utilize all surplus County lands(or proceeds from the sale of)for the
development ofvery low and extremely low-income housing with services
for special needs individuals and frimilies;
• Become an insurer or guarantor offinancing from public or private
sources for appropriate Special Needs Housing projects;
• Establish a revolving loan fimd that nonprofit developers could utilize to
secure land while additional financing is pursued.
• Establish a rental housing assistance fimd that developers can utilize to
buy down rents and help finance the development ofprojects for special
needs clients.
• Provide "catalyst fin^cing"to assist Special Needs Housing developers at
critical points in the project.
• Leverage "service contracts" to help finance Special Needs Housing
projects.
REGIONAL HOUSING ACTION PLAN SUBCOMMITTEE STRATEGY
RECOMMENDATIONS:
Finance
1.
Coimty should spearhead a Coimty-wide effort to secure a permanent source of
local revenue for affordable housing. The RHAP Committee discussed a myriad of
possible revenue streams and by consensus offers the following as suggested sources:
•Use the County's Redevelopment settlement with the City ofSan Jose.
•Support an increase in the percentage ofredevelopment tax-increment is
directed toward affordable housing(from 20% to 50%)and direct any settlements
with cities toward a Coxmtywide housing pool.
• Create a Countywide sales-tax revenue pool for affordable housing.
•Support legislation that will create Housing Redevelopment zones where
increases in property tax-increment is fimneled toward affordable housing.
While such a revenue source should be used to subsidize development ofhousing along
the continuum ofthe County's housing need,the Committee further recommends that a
portion be directed toward a fimd that can support infiustructure improvements in cities
to incentivize development ofaffordable housing and higher density housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Financial Constraints,
Decreased State/Federal Housing Assistance, Intensification of Use, Lack of
Irfrastructure, Cost ofCity Services/Fiscalization ofLand Use]
2.
The County should spearhead the development ofa local structure to spread tax
allocations County-wide (sales tax revenues on a per-capita basis for example).
[Timeframe: Medium/Long-term; Obstacles Addressed: Financial Constraints, Cost of
City Services/Fiscalization ofLand Use, Housin^JobS Imbalance]
10
3.
The County should help establish a non-profit Imd trust that can purchase
land/use public parcels. Thus,take land acquisition costs out ofthe equation for the
development and preservation ofaffordable housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Speculation, Financial
Constraints]
Regional Leadership/Expanded County Role
1.
The County should establish a Department ofHousing to both consolidate and
ejq)and the County's role in the development ofaffordable housing Countywide.
• To maximize the impact ofenhanced Covmty activity in housing, the County
should establish a County Commission on Housing that would include
representatives from all localjurisdictions. The Commission would not only
oversee the functions ofa Housing Department, it would foster a collective
dialogue on issues ofhousing and provide a vehicle for regional action. Among
the activities such an inter-Govermnental Commission should consider is
educating other elected officials on the importance ofaffordable housing
development in their cities, spearheading regional planning processes that will
mitigate the housing/jobs imbalance, and commenting on the housing elements
ofindividual cities to the State HCD.
[Timeframe: Short-term; Obstacles Addressed: Lack ofa Coordinated Strategy,
Density/Zoning, Lack ofPolitical Will]
2.
The County should take the lead in the development ofaffordable housing on
publicly owned land(County, State, City, VTA -owned parcels, etc.) and Should change
land use policies on the land under its jurisdiction to incentivize the development of
affordable housing and higher density housing. Recognizing this is a dramatic departure
from current practice, the Coimty should lead by example.
[Timeframe:Short/Medium-term; Obstacles Addressed: Growth Controls, Lack ofa
Coordinated Strategy]
^
3.
The Coimty should invest significant resources in a Conamunications Strategy that
will enhance community support for the development ofaffordable housing and greater
public investment in housing as part ofthe infrastructure (press relations, community
outreach, development ofcollaterals that will engage different constituencies in
addressing the housing crisis, etc.).
[Timeframe: Short-term; Obstacles Addressed: Lack ofPolitical Will, NIMBYism]
Other Key Recommendations:
•
In view ofthe fact that rent burden has increased on middle-and low-income
femilies, the County and local cities should study how they can provide rent relief. The
County should take a leadership role in this effort and actively sudvance the
implementation ofthe identified strategies.
[Timeframe: Short-term; Obstacles Addressed: Speculation, Lack ofPolitical Will]
11
•
The County should sponsor a design competition for architects to craft new forms
ofhousing (for example: work with private industry to come up with new types of worker
housing). Awards could include grants, or publishing a book ofgood ideas.
[Timeframe: Short-term; Obstacle Addressed: Limited Varieties ofNew Housing]
•.
Create community processes/structures that will involve local residents and
elected leaders in neighborhood planning efforts to include affordable housing.
[Timeframe: Medium-term; Obstacle Addressed: Intensification ofUse, NIMBYism]
•
The County should support and strengthen efforts to create more living wage
jobs.
[Timeframe:Short/Medium-term; Obstacles Addressed: Housing/Jobs Imbalance,
Speculation]
•
The VTA should purchase land and reuse surplus parcels for housing especially
high density and affordable units.
[Timeframe: Short-term; Obstacles Addressed: Transportation, Lack ofPolitical Will]
Legislation
1.
The Coimty should take a lead role in advocating for reform ofthe property tax
allocation structure created by Proposition 13. The current sy^em is widely perceived to
have created disincentives toward the development ofmore housing by cities.
[Timeframe: Long-term; Obstacles Addressed: Cost ofCity Services/Fiscalization of
Land Use]
2.
The County should take a leadership role in e^anding Federal housing assistance
by rallying community support for the National Housing Trust Legislation and actively
organizing for similar support from other Bay Area communities. Furthermore, the
County should spearhead this effort by preparing an analysis ofexisting federal programs
and how they work or do not work here based on the cost ofhousing and developable
land in our region.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal
Housing Assistance, Financial Constraints, Lack ofPolitical Will]
3.
The County should take a leadership role in expanding State housing assistance
by rallying community support for greater levels offimding for housing and to feirly
condensate regions with higher costs ofliving. In addition to analyzing the efficacy of
Federal programs given the disparate costs here,the County should also prepare an
analysis ofexisting state programs.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal
Housing Assistance, Financial Constraints]
Other Key Recommendations:
•
The County should support statewide legislation that will help enforce Housing
Elements developed by Cities. While consensus was not reached by the RHAP
12
Committee on the form ofsanctions that could be levied against cities, withhold fimding
from cities out ofcompliance was prioritized as a key tool.
[Timeframe: Short-Medium term; Obstacle Addressed: Weak Regulatory Guidelines]
•
The County should take a lead role in a Bay Area-wide lobbying effort for State
legislation correcting problems with Construction Defect Litigation.
[Timeframe:Short-Medium term; Obstacle Addressed: Construction Defect Litigation]
•
The County should help introduce state legislation that will permit CEQA
(California Environmental Quality Act)exemptions for affordable housing development.
[Timeframe:Long-term; Obstacles Addressed: Regulation, Growth Controls],
Zoning/Pianning/Land Use
1.
The County should lead efforts to increase density countywide using a multi-
faceted strategy: Leading by exan^le by creating an affordable housing exen:q)tion to
density limits for homing development; Encouraging our local political leadership ofto
increase density md affordable housing opportunities through planning and zoning policy
discussions and pushing for updates to General Plans; and creating incentives to higher
density /affordable housing development through an infrastructure improvement
conq)onent ofa local housing fimd.
[Timeframe: Medium/Long-term; Obstacles Addressed: Intensification of Use,
Density/Zoning, Growth Controls, Land Use Policy]
2.
The County should lead an effort to create incentives to build housing near transit
(infrastructure inqjrpvements, cheaper financing, etc-)[Timeframe: Medium-term; Obstacles Addressed: Transportation, Density/Zoning,
Growth Controls]
3.
At the Planning Department level: Fast track and prioritize affordable housing
development and encourage cities to the same.
[Timeframe: Short-term; Obstacles Addressed: Regulation]
Other Key Recommendations:
•
The County should support requirements for housing to be developed when any
significant commercial/industrial/retain/office development is proposed. By providing
leadership in a regional dialogue(an inter-govemmental Housing Commission,for
exariple)the County can help introduce such policy tools that may help mitigate the
impact ofrapid job growth and e3q)and the conversation to the responsibilities oflocal
employers to develop^housing.
[Timeframe:.Medium/Long-term; Obstacle Addressed: Housing/Jobs Imbalance]
•
The County should advocate and create incentives for mixed-use development in
infill and new communities(e.g. mid Coyote Valley).
[Timeframe: Medium-term; Obstacle Addressed: Land Use Policy]
13
•
The County should encourage cites to allow/incentivize secondary("granny")
units in existing residential areas
[Timeframe: Medium-term; Obstacles Addressed: Limited Varieties ofNew Housing,
Density/Zoning]
•
The County should create incentives for residential development in nonresidential areas (rezoning).
P'imeframe: Medium/Long-term; Obstacle Addressed: Intensification of Use]
14
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION IV
A VISION
There's no longer any doubt that Santa Clara County is in the midst ofa housing
crisis. Nearly every day, we see or hear yet another gloomy stoiy in the media
about housing shortages and high costs. In the 1980's, we first began hearing about
homelessness, something that had previously occurred during the Great Depression,
or in "other places". But here? In this prosperous place?
After a while, we became inured to the stories. Maybe we told ourselves that
homeless people were alcoholics, drug addicts, or, worse, mentally ill. In any case,
we certainly couldn't solve this complex problem. Not alone. Not without a lot of
money. And, besides, m^ybe "those people" didn't want our help.
Then,in the early 1990's, home prices started sharply escalating much more rapidly
than before. Now it wasn'tjust other people with problems, but our own children.
Home ownership, something we had begun to take for granted, was being priced out
ofreach. Sihcon Valley employees purchased houses in the Central ValleyStockton and Los Banos- and spent more than 4 hours per day commuting to and
fi-om work.
As the '90's progressed, the numbers offamilies - women and children-that found
themselves homeless became the fastest growing part ofthis tragic population. At
the same time, rents began to mirror home resale prices and skyrocketed. The
prices ofapartments rivaled those in Manhatten. Then we heard that people were
"doubling up" in houses-two or three families hving under one roof. We also
began hearing about RV's in company parking lots, housing bus drivers, carpenters,
and police officers.
The latest media stories are about people leaving the Valley in droves-looking for
more affordable housing and less stress in maintaining their lifestyles. It seems that
we have reached this question: how much worse does it have to get before we take
meaningful action? But is the Santa Clara County government the appropriate
organization to respond?
It's almost a secret that the County ofSanta Clara is responsible for housing
thousands ofpeople every day. Whether through development projects built(at
least in part) by the Housing Authority, or funded by sources flowing through the
county; people housed through the Section 8 program or assisted with vouchers
fi-om the Social Services Agency; people in drug and alcohol residential treatment
facilities; mentally disabled people in long-tenn care facilities; people in emergency
shelters and transitional housing units aided by the Collaborative on Housing and
Homelessness, and through contracts with nonprofit service providers; people in the
Health and Hospital system; or those incarcerated in county facilities, a great many
people put their heads on pillows each night at least in part because ofthe efforts of
Santa Clara County.
In fact, Santa Clara Coimty is recognized around the state md the country as an
innovative, effective, and caring provider of housing for its citizens. The Board of
Supervisors has consistently addressed the problem, usually with precious few
dollars or other resources. We have a solid tradition ofthe government, business,
nonprofit, and community sectors already working together. But there is so much
more that the county can do.
\
Better coordination ofexisting efforts would certainly be a good beginning. Perhaps
even some infrastructure re-organization may be in order. But a dire situation
requires bold action.
The problem can seem overwhelming; we may feel as though it CEumot be solved.
Cities often cite infrastructure costs as the reason not to build affordable housing.
The so-called NIMBY(Not In My Back Yard)syndrome drains political will; the
Federal government cuts taxes, and government spending; the state is burdened by
the energy crisis. Each jurisdiction looks to the others to create a solution. But who
is the government, ifnot we?
Housing activists in Washington, D.C., tell us that many on the Federal level are
looking to Silicon Valley for solutions. After all, they say, we have the brainpower
and the money. The recent success ofthe Housing Trust ofSanta Clara County in '
raising $20 million is a testament to our abilities, resources, and concern. In
addition, Santa Clara County is the "arrow head"; the problems have hit here first,
but will soon affect the rest ofthe country.
There are many here in Santa Clara County who^feel that solutions exist, but they
are complex, arid cannot be reduced to "sound bites". Only by working togetherthe county; the cities; school, transportation, and water districts; the State and
Federal governments-can we bring about needed changes in policy, planning, and
finance. But who will take the lead in convening the process? Who will finally say,
enough is enough? We think the time has never been more opportune for an historic
effort that will make Santa Clara County a leader in solving the housing crisis, arid
give Silicon Valley a name in more than technology.
i..
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION V
A CALL TO ACTION
In his State ofthe County Address earlier this year, the Honorable James T. Beall,
Chair ofthe Santa Clara County Board of Supervisors, called for the County to take
bold action in solving the housing crisis. Here is what he said:
Santa Clara County is in the grips ofa housing crisis. With the passage ofproposition
36,the rising number ofspecial needs clients, and the lack ofaffordable housing for
most residents, the time is right for the County to re-evaluate and perhaps redefine its
role in housing. The need has never been greater and the time has never been better
for bold action to significantly address the issue ofaffordable housing.
Supervisor Beall then called for an intensive community planning process to craft a
Housing Action Plan. The broad goal ofthis effort is to identify policy
recommendations for the Board of Supervisors to consider in addressing the housing
crisis.
On May 17, more than 200 community leaders, nonprofit service providers, housing
advocates, members ofthe faith community, and government officials came together
to help create a vision for this important work. A great deal of discussion ensued,
and the Santa Clara County Housing Task Force(SCCHTF)was bom. We
identified five major areas in which we could pursue potential actions and
recommendations, as follows:
• the Regional Blueprint Group, co-chaired by Chris Block and Poncho
Guevarra ofthe Housing Trust ofSanta Clara County;
• the Public Employees Group, co-chaired by Roger Barnes, ofthe Santa
Clara Unified School District and Kristy Sermersheim ofSERJ Local 715;
• the Government Surplus Land Group,co-chaired by Alex Sanchez ofthe
Housing Authority of Santa Clara Coimty, and Bonnie Bamburg of
Community Housing Developers, Inc.;
• the Special Needs Group, co-chaired by WiU Lightboume ofthe Social
Services Agency ofSanta Clara County, and Frank Motta ofthe Corporation
for Supportive Housing; and,
• the Land Trust Group, chaired by Ray ViUareal, the interim Housing
Coordinator for Santa Clara County.
The groups were directed to meet several times over the course ofthe following 90
days, and to develop sets ofrecommendations for short-, mid-, and long-term
objectives that would then be forwarded to the Board of Supervisors for their
consideration.
The following principles were developed as a means to guide the work ofeach
group:
Define the problem/need.
^ Identify and develop strategies using short, medium, and long-term goals.
Consider resources and barriers, especially as they apply to Santa Clara
County.
Objectives must be focused and qujantifiable.
Recognize the County's role in housing production, creation, and
preservation.
Recognize the work ofothers and ifpossible, build upon that.
^ Assign tasks and responsibilities.
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VI
A PROCESS
Paul Wysocki,Project Management Consultant, was engaged to guide the process,
assist with internal and external communication, and ensure that timelines were
respected. The five assigned working groups feU into 2 basic committees: the
Regional Blueprint Group formed the Regional Housing Action Plan(RHAP)
Committee, and generally addressed "Macro" aiid regional planning issues. CoChairs Chris Block and Poncho Guevarra ofthe Housing Trust of Santa Clara
County oversaw this work.
The other four groups-Public Employees, Government Surplus Land, Special
Needs, and Land Trust comprised an overall committee that was more specifically
focused on particular issues. Ray Villareal, Interim Housing Coordinator for Santa
Clara County, staffed these groups. /
Each ofthese subcommittees met several times during the summer. Each oftheni
followed the guiding principles as they developed their own sets of missions,
problem statements, and short-, mid-, and long-term objectives. (Meeting minutes,
group membership, and objectives are all contained in this report).
The subcommittee chairs also met during the summer as the Housing Task Force
Steering Cotnmittee to help guide the unfolding process, as well as to consider how
the objectives would be delivered to the Board of Supervisors. Their separate
objectives are found in the conclusion ofthis teport.
In addition, Wysocki and Chris Block met with the Director ofthe County Planning
Department, Ann Draper, and her staff. The purpose was to discuss the Planning
Department's work on the Housing Element Report, mandated by the state, and how
that report would interact with the Housing Task Force, as well as with the
Supportive Housing Initiative work, convened by Ray Villareal. A memo describing
the work of all three efforts follows in this section.
This report, dated Augi^t 21, 2001, represents the status ofthe work done to date of
the Task Force. While most ofthe objectives have been developed, much work
remains. The RHAP is still engaged in formulating Action Steps for implementation
ofits objectives. In addition, some research remains to be completed. Some ofthe
research topics include:
•
•
•
•
A realistic look at actual need, based upon 2000 census and other data;
County-wide Housing production figures, both historic & projected;
Housing subsidy levels, both historic & projected;
The "elasticity" of housing prices, as affected by supply and demand;
• A look at the "Rent Burdeh" faced by consumers (i.e., the percentage of
gross income allocated to housing costs), especially in light ofthe recent
spikes in rental ratesv
This next phase ofthe process is the Comment Phase. After the Board of
Supervisors has received this report, it will be circulated among elected officials,
business leaders and the community for review. The entire Task Force will meet in
a plenary session on Thursday, September 13 for discussion ofthe overall work. A
briefing session will also be held for elected officials later in September.
Following the Comment Phase, a final report will be delivered to the Board of
Supervisors during a Housing Workshop scheduled for Tuesday, October 16, 2001,
at 1:30 PM.
I
[
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VII
THE FOUR WORK GROUPS
Santa Clara County Housing Task Force
Subcommittee Meeting Schedule
Time:
Government Surpius Land
see Housing Authority Conference Room
3:00 pm - 5:00 pm
Date:
June 21
Subcommittee:
Location:
July 17 ** 3:30 pm - County Building, 7"^ Floor Conference Room
July 26
August 9
Co-Chairs:
Alex Sanchez
Bonnie Bamburg
Subcommittee:
Location:
Special Needs Housing
Time:
1:30 pm -4:30 pm
Date:
June 19
Co-Chairs:
July 11
July 31
August 7
Will LightbOurne
County Building -11*" Floor Conference Room
Frank Motta
Time:
Public/Co. Service Employee Housing Assistance
11*" Floor Conference Room
2:00 pm - 4:00 pm
Date:
June 14
Subcomrnittee:
Location:
July 5
July 19 ** County Building 10*" Floor Conference Room
Co-Chairs:
August 2
August 9
Roger Barnes
Kristy Sermersheim
Time:
Community Land Trust
County Building - Downstairs conference rooms(TBD)
7:00 pm - 9:00 pm
Date:
June 7
Subcommittee:
Location:
June 19
Chair:
July 12 ** 4:00 pm -6:00 pm, Isaac Newton Auditorium
July 24
Ray Villarreal
SANTA CLARA COUNTY HOUSING TASK
FORCE:
COMMUNITY LAND TRUST
Santa Clara County Housing Task Force
Community Land Trust Subcommittee
Final Report
^
August 8, 2001
Phyllis Ward, Affordable Housing Network
Naphtali Knox, Housing Consultant
Mary Reid, Neighborhood Housing Services, Silicon Valley
Staff: Ray Villarreal, SCO Housing Coordinator
Community Land Trust Subcommittee
Final Report
August 8,2001
After consideration of the merits of the various Community Land Trust models, the
Community Land Trust Subcommittee makes the following recommendations.
Short-term Recommendations:
1. Objective: The Subcommittee recommends the Board of Supervisors sponsor
the creation of a countywide,"Affordable Housing Land Bank".
A) The County should immediately assign a small working group to find an appropriate
partner to draw up the Articles of Incorporation, file with the state, draft bylaws,
recruit a Board of Directors etc., and formally establish the "Santa Clara County
Affordable Housing Land Bank"(AHLB).
B) The purpose of the AHLB would be to advance the development of affordable
housing opportunities in Santa Clara County, with special emphasis on low, very
low and extremely low-income housing.
*
C) The AHLB would be charged to accept, hold and administer land, facilities and
funds contributed to the AHLB:
D) The AHLB would be charged to acquire and sell lands for the purpose of giving the
organization the flexibility and means to be effective developing affordable housing
opportunities.
E) The County should make the first contribution of appropriate surplus land to the
AHLB and begin a public campaign to encourage other jurisdictions, corporations,
foundations and private individuals to do the same.
F) The AHLB must establish broad community support for its efforts to develop
affordable housing by establishing partnerships between the County, Cities, for
profit and nonprofit developers, service providers and local philanthropic
organizations.
Mid-term Recommendations:
1. Objective: The AHLB Board of Directors should establish organizational
goals and criteria for the affordable housing projects it will support.
A)
Lands administered by the AHLB would be made available for development
of affordable housing opportunities for low, very low, and extremely low income
populations with emphasis placed on housing opportunities for the following;
A)
1)
Public employees
2)
Non profit service workers
3)
Special Needs Populations
4)
Working Poor Families
The AHLB would support those projects that offered opportunities for
homeownership and rental housing assistance.
1)
Homeownership would be available to those who earn less than
80% of the area median income.
2)
Rental Assistance would be available to those who earn less
than 50% of the area median income.
C)The AHLB would give preference to those projects that promoted the community
interests by adhering to smart growth principles.
D)
The AHLB would establish other goals and criteria as needed.
Long-term Recommendations:
1. Objective: Over the long term,the AHLB must be engaged in an active
campaign of soliciting available lands throughout the county for the
development of affordable housing.
A)
The following jurisdictions and private and nonprofit entities are potential
sources for donated or discounted land that may become available to the AHLB.
1.
Local Governments
a.
Cities
b.
County Agencies
0.
School Districts
d.
Special Tax Districts-VTA, Water District, Sanitation,
Open Space etc.,
1.
State & Federal agencies
2.
Foundations
3.
Nonprofits
4.
Large, local companies
5.
Abandoned,foreclosed, derelict or distressed properties
6.
Private citizens
1. Objective: Over the long term, the AHLB must acquire a source(s) of ongoing
funding for the purpose of buying and administering lands.
A) The following potential sources of funding that may become available to the AHLB.
a.
CDBG & Home Funds
b.
Housing Trust and other Foundations
c.
Other HUD programs
d.
State HCD and CHFA programs
e.
Pension Funds
f.
Lenders Looking for CRA credits
g.
Fannie Mae, Freddie Mac
h.
Local Governments
1)
City Redevelopment,Agencles 20% set aside funds
2)
In-lieu fees from development
3)
Inclusionary zoning assets
4)
passage of a local tax for land acquisition
5)
job creation linkage fees
Community Land Trust Presentation
July 12, 2001
1.
Welcome & Introductions - Paul Wysocki
We have invited two local experts on establishing and running Community
Land trusts in the Bay Area. Both have extensive experience in the North Bay
utilizing the CLT model to produce affordable ownership and rental
Housing in a number of different jurisdictions.
They are:
David Jay Bonn - Executive Director, Northern California Community Land
Trust
Clark A. Blasdell, President and CEO, Suburban Alternatives Land Trust(SALT)
Northbay Family Homes(Based in Novato)
2.
Speaker #1 - David Jay Bonn to speak 20-30 minutes
3.
Speaker #2- Clark Blasdell to speak 20- 30 minutes
4.
Questions & Answers- Ray Villarreal to direct
5.
Wrap up & Thank you - Paul Wysocki
SANTA CLARA COUNTY HOUSING TASK
FORCE:
GOVERNMENT SURPLUS LAND
Santa Clara County Housing Task Force
Government Surplus Land Subcommittee
Final Report
August 9, 2001
Co-Chair-Alex Sanchez,Santa Clara County Housing Authority
Co-ChaIr- Bonnie Bamburg, First Community Housing
Mark Lazzarini,
Bill Arnopp, Silicon Valley Habitat for Humanity
John Moore, ACORN
Mike Eaton, City of San Jose - Housing Department
Chris Bloch, Housing Trust
Heidi Wolf-Reid, SCC Association of Realtors
Betty Feldheym, Interfaith Council
Julie Render, VTA
Mary Hughes,
Margaret Gregg, Santa Clara County Homeless Coordinator
Trish Crowder,,^
Patrick Maben-Hammon, Silicon Valley Manufacturing Group
Andrea Papanasmassiou, Mid Peninsula Housing
Staff: Ray Vlllarreal, SCC Housing Coordinator
Government Surplus Land Subcommittee
Final Report
August 9, 2001
Statement of the Problem
There are many causes for the housing crises in Santa Clara County and unfortunately,
there are not any easy solutions. However, almost universally recognized as the key to
working our way of it; is the availability of accessible, affordable land. Developers of
low income, affordable housing agree that it is their limited ability to buy or control land
that primarily restricts their ability to build.
The subcommittee believes that government at all levels and local public institutions
must rethink their traditional reluctance to use public owned lands for long term
affordable housing in the county. The lack of affordable housing is:
a)
impacting government's ability to recruit and retain public employees
and thereby impacting their ability to deliver effective services;
b)
impacting the long term health and vitality of the local economy
because service workers cannot afford to live here;
c)
straining to the breaking point our overall county housing services
capacity for very low and extremely low income special needs individuals
and families.
We believe it is necessary and appropriate for the County, at this time, to take a
leadership role bringing together local public institutions and jurisdictions to make
government owned surplus land available for the development of affordable housing.
Statement of Purpose
The purpose of the Government Surplus Land Subcommittee is to recommend to the
Board of Supervisors ways and means for County government and other local
jurisdictions to make surplus land available for affordable housing development. To
accomplish this, the Subcommittee focused on: 1) what are the barriers to making
government owned surplus land available for affordable housing; 2) strategies for
overcoming the barriers; and 3) what kinds of surplus lands should be considered for
affordable housing development.
Scope of Work
The Subcommittee agreed that the recommendations put forward in this report are
intended for government at all levels with vacant or surplus land in Santa Clara County,
including public institutions and special tax districts.
For purposes of this report, we
will refer to the above definition as "publicly owned lands."
Mission Statement
It is the mission of this Subcommittee to make short, medium, and long-term
recommendations to the County Board of Supervisors to take a proactive leadership
role in the efforts to make publicly owned surplus lands in Santa Clara County available
for affordable housing development.
Barriers to Utilizing Publiciv Owned Surplus Land for Affordable housing
The Subcommittee identified the following barriers.
A)
The inaccessibility of accurate, updated, complete lists of surplus or
vacant land inventories.
8)
The inability of housing advocates to Influence decision making on
what available government owned lands are deemed surplus.
C)
The inability of housing advocates to influence land use decisions
concerning the disposition of government owned surplus land.
0)
The lack of broad community commitment to use government owned
land for affordable housing.
E)
The lack of political commitment and/or direction by local jurisdictions
to use government owned land for affordable housing.
F)
The lack of a clear, common definition what constitutes publicly owned
surplus land, as well as a process for determining when vacant or under
utilized property becomes "surplus" and therefore available to be used for
affordable housing purposes.
Short-term Recommendations
1. Objective: Develop strategies for overcoming the barriers to using
government owned surplus lands for affordable housing.
A)
The Board of Supervisors should adoptia resolution declaring a "State
of Affordable Housing Emergency" and urging the following actions:
f
1.
The County's intent to use all vacant or surplus lands owned by the
County for the purpose of developing affordable housing;
2.
All local, state and federal jurisdictions including special tax districts in
the county to join with Santa Clara County making their own surplus lands
available for the production of affordable housing;
3.
^
The County will hire a consultant to compile an inventory of all vacant
or surplus land owned by local, state and federal governments in the county,
including special tax districts that also own surplus land in the county;
4.
The County will establish a new process for evaluating and then
declaring which County owned lands are considered surplus or excess land,^
L.
thus, making such lands available for affordable housing development;
5.
The County strongly reaffirms its intention to follow through on its own
stated objectives in the SCC General Plans' Housing Element;
6.
Our state delegation to sponsor legislation requiring local jurisdictions
to include in their Housing Elements a section, describing in detail all vacant
and "surplus lands" owned by the jurisdiction, including their intentions for
future use and timeline. The group would like to see legislation making
Santa Clara County a pilot project.
7.
"Surplus Lands are vacant or under utilized lands or structures that
have not had clearly defined uses the past 5 years and do not have defined
uses over the next 5 years. Surplus lands also include "air rights" where
mixed-use developments are suitable for affordable housing projects".
A)
The County should develop a countywide Affordable Housing
Land Bank, outside of County government,to hold & manage donated
or purchased land for the singular purpose of developing affordable
housing.
1.
The County Land Bank would seek initial funding from local
jurisdictions, RDA's, the Housing Trust and private and philanthropic
sources.
2.
All local jurisdictions and the state would make contributions to the
"County Land Bank" for the single purpose of building permanent affordable
housing developments.
3.
The County Land Bank would also be empowered to purchase
government surplus lands for affordable housing developments.
4.
The Land Bank would also be empowered to purchase private lands or
residential buildings for affordable housing developments or rehabilitation.
5.
The County should require that the Land Bank will work in partnership
with the see Housing Trust, the SCC Housing Authority or a local non-profit
development corporation.
6.
The County should urge jurisdictions to deposit "surplus lands" in the
County Land Bank for a specified period of time. If the surplus lands are not
utilized by the jurisdiction within the specified time, the Land Bank can either
sell the property with the proceeds going towards affordable housing, or
advance the development of the property into affordable housing.
7.
The Land Bank should hold annual public hearings on the disposition
ofjurisdictions surplus lands and there intended usage, filing a report each
year with the Board of Supervisors.
The Committee developed criteria for determining what are the most appropriate
Publicly Owned Surplus Lands for affordable housing. They are as follows:
A)
Access/Availability of existing infrastructure;
B)
Opportunities for mixed use developments;
C)
Partnership opportunities (for land, financing or resources) with other
local jurisdictions and/or private owners;
D)
Consider and address current policies relative to the sale, lease or
gifting of government surplus property;
E)
Consider political issues relative to affordable housing developments;
F)
Analyze cost of on site improvements;
G)
Consider lands that lend themselves to high-density developments a
high priority.
Government Surplus Land Subcommittee
June 7, 2001
Meeting Minutes
Meeting began at 3:10 p.m.
Present:
Co-Chair Alex Sanchez, Co-Chair Bonnie Bamburg, Heidi Wolf-Reid,
Betty Feldheym, Julie Render, Mary Hughes, Bill Arhopp, John Moore,
Margaret Gregg, Irish Crowder, Patrick Maben-Hammon, Mike Eaton,
Andrea Papanasmassiou
Staff:
Ray Villarreal, SCC Housing Coordinator
1.
Purpose of the Committee - Co-Chair, Alex Sanchez opened the meeting by
reading a letter from Supervisor Beali explaining the purpose of the
Subcommittee is to develop specific short and long term strategies which the
County can employ to address the housing crisis of persons with special needs.
2.
Work Pian - The Subcommittee reviewed the work plan to produce a report for
presentation to the full Housing Task Force in September. Those steps include:
a.
Examination of Current County/City- Policies/State Law relative to the
cjischarge of government surplus property
Examination of current programs/reports on utilizing surplus
government land
c.
Search County and other jurisdictions for available inventory
b.
1.
d.
Analyze Inventory and establish parameters/priorities
e.
f.
Quantify potential units
Report to the Board
Guiding Principies-The Subcommittee brainstormed on some guidelines to
assist them as they proceed with this project.
a.
b.
c.
d.
e.
f.
The group must agree on a common definition of "Surplus Property."
The group would like County Counsel to be available to answer
questions and help direct the committee.
The group agreed they must recognize geo-technical limitations of
some government owned property.
The group will look for partnership opportunities between government
surplus property and other jurisdictions and or private owners.
The group should consider mixed uses of government surplus land.
By consensus, the group agreed they could not evaluate all
"government surplus property in the county. The group narrowed its'
evaluation to include surplus property of the County, VTA,SCC Department
of Education and the SCC Water District.
g.
The group will develop a uniform process for evaluating government
surplus, using the above jurisdictions as examples.
1.
Reports/Resources-The Subcommittee will use the following reports and
resources to assist in the project.
a.
b.
c.
d.
1,
Silicon Valley Manufacturing Group - Available Land Survey
City of San Jose Housing Opportunity Study
VTA - Report on transit oriented development
County and Cities Consolidated Plans
Assignments- The following subcommittee members agreed to retrieve the
following materials for consideration at our upcoming meetings.
a.
Lists of Vacant/Surplus properties:
1)
2)
3)
4)
a.
b.
County owned properties- Ray
County Department of Education - Mike Eaton
VTA - Julie Render
Water District- Bonnie Bamburg
County Consolidated Plan - Margaret Gregg
City of San Jose Report on state codes relative to sale or lease of
government land - Mike Eaton.
6.
Meeting Adjourned at 4:30 p.m.
7.
Next Meeting - June 21, 2001 at 3:00 p.m., SCC Housing Authority Conference
Room
Government Surplus Land Subcommittee
June 21, 2001
Meeting Minutes
Meeting began at 3:10 p.m.
Present:
Heidi Wolf-Reid, Betty Feldheym, Bill Arnopp, Margaret Gregg, Irish
Crowder, Mike Eaton, Andrea Papanasmassidu, Chris Bloch
Staff:
Ray Villarreal, SCO Housing Coordinator
1. Review of previous meeting minutes - The Subcommittee reviewed the previous
meeting minutes.
2. Community Land Trust - The Subcommittee discussed the merits of the
Community Land Trust model.
3. Reports- Mike Eaton presented his report of the process the San Jose
Redevelopment Agency must follow in discharging surplus or excess property.
4. Ray Villarreal presented the VTA list of surplus or excess property researched by
Julie Render, of the VTA.
5. Barriers to utilizing government surplus land for housing - The subcommittee
brainstormed on barriers to using surplus government owned land for affordable
housing.
a.
Easy availability of accurate, updated, complete lists of surplus or
vacant land inventories;
b.
Lack of community commitment to use government owned land for
affordable housing;
0.
Lack of political direction by local jurisdictions to use government
owned land for affordable housing;
d.
Lack of a common definition of"Surplus Land".
6. Establishing Countywide policy recommendations on surplus land a.,
The subcommittee discussed strategies to overcoming the barriers to
using government owned surplus lands for affordable housing.
b.
The Board of Supervisors should adopt a resolution to do the
following:
1)
The County shouid declare that all vacant or surplua lands
owned by the Qounty be used for the development of affordable housing
to the extent possible given the size and nature of the land available;
2)
The County should encourage all local jurisdictions and special
tax districts in the
County to join with Santa Clara County in this effort to produce affordable
housing;
3)
The County should hire a consultant to compile an inventory of
all vacant or surplus, local government and special tax district owned
lands in the county;
4)
The County should create a process for evaluating and then
declaring which County owned lands are considered surplus or excess
land, thus, making such lands available for affordable housing
. development;
5)
The County should establish or sponsor a land trust or land
bank outside of County government to hold & manage donated or
purchased land for the purpose of affordable housing development;
6)
The County should consider that the Land Trust work with the
see Housing Trust, or a local noo'-profit development corporation;
7)
The County should strongly reaffirm its intention to follow
through on its own stated objectives in the SCC General Plans' Housing
Element.
6.
Meeting Adjourned at 4:40 p.m.
7.
Next Meeting -July 17,2001 at 3:00 p.m.. Location to be determined.
Government Surplus Land Subcommittee
July 17,2001
Meeting Minutes
Meeting began at 3:45 p.m.
Present;
Heidi Wolf-Reid, Mike Eaton, Betty Feldheym,
Staff:
Ray Villarreal, SCC Housing Coordinator
Nancy Fowler, County General Services Agency
1. Review of previous meeting minutes - The Subcommittee reviewed the previous
meeting minutes.
1. Surplus Government Property Reports
a)
Ray Villarreal presented a GSA report(1998)on surplus property
owned by the County. GSA reported that it currently was working on several
projects having to do with the development of affordable housing, including:
the County Fairgrounds property, Fair Oaks property (Sunnyvale) and
Elmwood property (Milpitas).
b)
A memo provided by Alex Sanchez was provided detailing the efforts
of San Jose in utilizing surplus government property for affordable housing.
c)
Mike Eaton provided a memo from the Affordable Housing Network
detailirig recommendations for the development of affordable housing on
surplus government property.
1. Strategies Discussion
a)
The subcommittee recommended the County consider developing a
countywide Affordable Housing Lands Bank.
1)
All local jurisdictions and the state would make contributions to
the "County Land Bank" for the single purpose of building permanent
affordable housing developments.
2)
The County Land Bank would also be empowered to purchase
government surplus lands for affordable housing developments.
3)
The Bank would also be empowered to purchase private lands
or residential buildings for affordable housing developments or
rehabilitation.
4)
The County Land Bank would seek initial funding from local
jurisdictions, RDA's, the Housing Trust and private and philanthropic
sources.
1. Staff Direction - Staff was directed to organize previous meeting efforts into
consistent strategy groupings discussion at our next meeting July 26, 2001.
2. Meeting Adjourned at 5:15 pm.
3. Next Meeting - Scheduled for July 26, 2001 - 3:00 pm at the Santa Clara County
Housing Authority Conference Room.
Government Surplus Land Subcommittee
July 26, 2001
Meeting Minutes
Meeting began at 3:45 p.m.
Present:
Alex Sanchez, Bonnie Bamburg, John Moore, Mike Eaton, Chris Bloch
Staff:
Ray Villarreal, SCO Housing Coordinator
Paul Wysocki, Project Coordinator
1. Meeting Minutes - The Subcommittee reviewed the previous meeting minutes.
1. Strategy Groupings Discussion A.
Strategy Grouping 1)F). The group emphasized it was critical that
they develop a clear definition of government surplus land, as well as
developing a process for determining when vacant or under utilized property
becomes"surplus" and therefore available to be used for affordable housing
purposes.
B.
Strategy Grouping 2)A)should include the following definition of
Surplus Land:
Surplus Lands are vacant or under utilized lands or structures that have
not had clearly defined uses the past 5 years and do not have defined
uses over the next5 years. Surplus lands also include "air righte x
where mixed-use developments are suitable for affordable housing
projects.
C.
Strategy Grouping 2)A) 1 should include requiring the consultant to
compile all surplus state and federal lands in the County within the scope of
his/her work.
D.
Strategy Grouping 2)A)should include a strategy to lobby our state
delegation for legislation requiring local Jurisdictions to include in their
Housing Elements a section on describing in detail "surplus lands" owned by
the jurisdiction. The group would like to see legislation making Santa Clara
County a pilot project.
E.
Strategy Grouping 2) B). Should require jurisdictions to deposit
"surplus lands" in the County Land Bank for a specified period of time. If the
surplus lands are not utilized by the jurisdiction within the specified time, the
Land Bank carl either sell the property with the proceeds going towards
affordable housing, or advance the development of the property Into
affordable housing.
F.
Strategy Grouping 2) B)should require the Land Bank'to conduct
public hearings on the disposition of jurisdictions surplus lands and there
Intended usage.
1. Issues regarding report writing:
A.
The group discussed and recommends the Housing Task Force
project coordinator hire a professional writer with housing related experience
to work with the HTF,the steering committee and write the report.
B.
The group discussed and racommends the Steering Committee of the
HTF develop recommendations pertaining to the structural Implementation of
the HTF final report.
0.
The group discussed and recommends the final HTF report "dispel the
myths" regarding the County's supposed lack of a role in local affordable
housing development and services.
1. Staff Direction - Staff was directed to Incorporate the above changes Into the
Strategy Groupings working paper for review at the committees next meeting.
2. Meeting Adjourned at 5:15 pm.
3. Next Meeting - Scheduled for August 9, 2001 3:00 pm at the Santa Clara County
Houslrig Authority Conference Room.
SANTA CLARA COUNTY HOUSING TASK
FORCE:
PUBLIC EMPLOYEES HOUSING
ASSISTANCE
Santa Clara County Housing Task Force
Public Employees Housing Assistance Subcommittee
^
Final Report
August 2, 2001
Chair- Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz, Co. Santa Clara, Social Services Agency;
John Tripp, Foundation Trust Mortgage Sepurities;
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Alliance for Community Care;
Chuck Corr, San Jose Unified School District;
Tom Fink, ATU-Local 265
Cyndy Amado, Local 535 Member, SSA
Christine Baucus, ESA Human Resources
Jane Decker, Deputy County Executive
Staff: Ray Villarreal, see Housing Coordinator
Public Employees Housing Assistance Subcommittee
Final Report
August 2, 2001
Statement of the Problem
The housing crisis in Santa Clara County impacts all local public institutions and
jurisdictions severely limiting our ability to recruit and retain high quality public
employees. This greatly affects the quality of services provided by local governments
including critical services like education, public health and safety. We believe it is
necessary and appropriate for the County to take a leadership role bringing together
local public institutions and jurisdictions to address in a meaningful way our common
dilemma.
Statement of Puroose
The purpose of the Public Employees/Contract Service Workers Housing Services
Subcommittee is to recommend ways for the County and other local agencies to recruit
and retain public employees by helping them to solve the housing cost and supply
crisis.
To accomplish this, the Committee is looking at housing assistance as a recruiting and
retention tool and therefore recommends looking at housing assistance as a non-
traditional County supplied service (for public employees only). And^ therefore, not to
be confused with or considered in discussions about housing for homeless, low-income
or special needs clients of the County's traditional services. The problem of recruiting
and retaining public employees begs for a solution of its own.
The intent of the Subcommittee's recommendations is that solutions do not cost the
County, any of its agencies or taxpayers any money in the long run. All funds expended
will be paid back to the originating fund at some time in the future.
Scope of Work
The Subcommittee agreed that the recommendations and proposed services put
fon/vard in this report are intended to be available to all public employees who currently
work in Santa Clara County, as well as employees of community based organizations
that contract with the County and provide health and human services. For purposes of
this report, we will refer to the above definition as "public employees."
Mission Statement
It is the mission of this Subcommittee to make short, medium, and long-term
recommendations to assist the County and other local agencies in recruiting and
retaining high quality public employees by implementing a countywide housing
assistance program for all public employees.
Short Term Recommendations
The following objectives can be achieved in a relatively short period of time and will
give the County the necessary information for crafting a program that meets the needs
of all public employees.
Objective: The County must acquire meaningful data and information regarding
the impact the housing crisis is having on the ability of public jurisdictions and
institutions to recruit and retain public employees.
• The County should collect data on local economic trends, salary levels,
j
turnover rates, job vacancy rates, housing costs, caseloads and
anecdotal information to aid in identifying solutions. ^
• The County should find out what public employees really want or need by
conducting surveys and focus group discussions.
• The County should compare and evaluate information collected with other
similar information collected from other areas.
• The County should seek partnerships with other local jurisdictions and
agencies to contract for the research and evaluation of the problem
Objective:
The County should establish a countywide Housing Education
Assistance Program for all public employees.
• The Program will provide information and educational services regarding:
> Home buying process
> Rental process
> How to take advantage of existing programs
> Using transportation to maximize living decisions
• The program will explore other incentives that jurisdictions are using to
attract and retain quality employees.
• The program should develop a marketing program to inform potential
public employees as to why Santa Clara County is such a great place to
live despite the high cost of housing
• The County should partner with Other interested local agencies for
support and assistance
• The County should develop a countywide Housing Services & Information
web site for public employees to access housing information and
services.
iWedium Term Recommendations
Once a needs assessment is completed and information is evaluated and
organized in a meaningfui way, the County can impiement the foliowing
objectives.
Objective: The County should establish and/or partner with existing organizations in
implementing a countywide Housing Assistance Program for public employees.
• The program wiii provide home purchase financiai assistance inciuding:
> Down payment assistance
> Monthly mortgage payment assistance
> Closing cost assistance
> Service to help home buyers take advantage of all available programs
> Seek support and financial assistance from PERS & STRS
• The program will provide rental assistance including;
> Monthly rental assistance
> Reduced move-in costs -security deposit assistance
> Information service to locate affordable units
> Service to match roommates
> Seek support and financial assistance from PERS & STRS
Objective: The County should convene a countywide Housing Advisory Commission
made up of elected officials and citizens whose purpose would be to develop regional
solutions to the housing crisis. The MAC would be charged to:
• Create partnerships with other groups and jurisdictions that are working to
solve the public employee housing crisis and consolidate efforts at
solving the problem;
• Work with our state and federal delegations and appropriate agencies to
provide tax incentives for public employees who live in high cost areas;
• Work with our state and federal delegations and appropriate agencies to
provide tax incentives for property owners and developers to provide
affordable housing opportunities for public employees;
• Partner with local jurisdictions to effect land use policies that result in
affordable housing units being created;
• Work to change building policies in the county to encourage the formation
of more rental and affordable for-purchase units;
• Work to improve the transportation infrastructure so public employees can
get to and from work easily, no matter where they live;
• Explore the feasibility of building employee housing outside of the county
and then provide efficient transportation specifically for employees;
• Explore the feasibility of increasing the number of manufactured home
parks in the county;
• Develop an ongoing education campaign to build political and community
support for the development of affordable housing.
Long Term Recommendations
Over the long term the County should Implement the following objectives towards the
development of affordable housing options for public employees.
Objective: The County should establish a Housing Department. One of its many
purposes would be to advance the development of affordable housing
opportunities on County surplus land or on unincorporated lands for County
public employees. The County Housing Department would be charged to:
• Acquire existing residential structures and convert them to County
employee housing:
• Explore the availability of housing at Moffett Field;
• Build "transitional housing" or "commute units" for public employees;
• Develop a financing methodology similar to a Credit Union or employee
funded casualty assistance fund;
• Provide incentives for builders to create more affordable housing units
specifically for public employees;
• Encourage building affordable rental or for-purchase housing on County
or local agencies owned land.
I
Objective: The County should develop new resources and/or funding sources for
the purpose of developing affordable housing opportunities.
Potential new
resources or funding could include but not be limited to the following:
Surplus Government Land for building affordable housing units;
Units/Land acquired through Inclusionary Zoning, Density Bonuses;
/
Special Tax districts;
Bond Financing;
Housing development/Commercial development fees;
Local taxes;
Local foundations;
Pension Funds;
Additional state and federal assistance.
Public Employee Housing Assistance Subcommittee
May 31, 2001 Meeting
MINUTES
Meeting began at 2:40 p.m.
Present: , Marcel Pajuelo-Schwartz, County of Santa Clara, Social Services Agency;
John Tripp, Foundation Trust Mortgage Securities;
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Ajliance for Community Care;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Staff:
^
Jane Decker, Deputy County Executive, Acting Chairperson
Ray Villarreal, Housing Coordinator
Leslie Orta, County of Santa Clara, County Counsel
1.
Purpose of the Committee -Acting Chairperson, Jane Decker, opened the
meeting by explaining that the purpose of the Public Employee Housing
Assistance Subcommittee is to develop specific strategies, both short-term and
long-term, that the County could employ to address the housing problems of
public service employees. These strategies or recommendations will be
forwarded to the Board of Supervisors for approval.
2.
Work Plan -The Subcommittee will follow a straightfonA^ard work plan to
produce a report. Those steps include;
Defining the Problem/Need
Definihg the Scope of the Work
identifying Stake Hoidem
identifying short term and long term Strategies to Address:
Resources
Barriers
Examples of what other jurisdictions are doing
identified Products or Outcomes
It was the consensus of the group to meet approximately every 2-3 weeks and
develop a report by August 15, 2001
3.
Defining the Problem/Need -The Subcommittee brainstormed and discussed
symptoms of the housing problems of public employees and the resultant
impacts on employees, institutions and agencies.
The Problem:
The demand for housing in Santa Clara County far exceeds supply
available.
^ The high cost of housing in Santa Clara County, both rental and home
ownership, is an extreme burden for the average public employee.
The Symptoms:
^ More public employees are living further from their jobs and commuting
long hours to get to work.
^ Long commutes for all employees mean less time with their families and
the inability to be involved in their local communities in a meaningful way.
/
Long commutes are stressful for employees. Those public employees in
customer service or other high stress jobs are particularly affected.Moral is low and job performance is affected.
Long commutes for all employees generate severe congestion and smog.
Long commutes for all ernployees hurt the local economy because of the
loss in productivity and revenue.
^ Public agencies are having a difficult time attracting and retaining skilled,
quality employees.
^ Public agencies are experiencing high rates of turnover and losing more
experienced employees. Who also serve as mentors to new
/
V Public agencies are experiencing critical shortages of nurses, teachers,
fire fighters, police officers and other critical service employees.
Public agency's ability to effectively deal with catastrophes is
compromised by shortages and employees living out of the area.
4.
Defining the Scope of Work
The committee agreed that employees of nonprofit agencies, who cpntract
directly with the County to provide critical social services, such as health and
social services, should be included as public employees for purposes of the
Committees' work.
5.
Strategies- A Brainstorming Session - The County should consider the
following:
a. acquiring existing residential structures, i.e., apartments;
b. looking into the availability of using housing at Moffett Field;
c. developing educational material and resources about housing
assistance opportunities for public/CBO employees;
d. developing "transitional housing" or "commute units" for public/CBO
employees;
e. Developing additional transportation services to South County and to
San Benito and Merced Counties;
f. Looking into implementing the Rental Assistance Program of TriCounty Apartment Owners Association;
g. Pursuing additional state legislation supporting public employee
housing;
h. Exploring the feasibility of tax exempt loans for rental down payment
assistance for specific employee groups;
i. Exploring the feasibility of home ownership, down payment assistance
programs in Santa Clara County for public employees:
1. City of San Jose, Homebuyer Program for Teachers
2. Silicon Valley Neighborhood Services Program
3. Shared Equity Program - in Santa Clara Unified School District
j. Developing a Count^ide Housing Web Site that makes provides
information on available affordable housing projects/units,
products/assistance, and services.
6.
Next Steps - The Committee didn't finish the May 31 agenda, so will continue
working on the pieces of the workplan on June 14.
7.
Next Meeting - The Committee will meet again on June 14, 2001 at 2:00 p.m.,
11"^ Floor Conference Rooms 1 & 2.
Meeting Adjourned at 4:30 p.m.
Public Emplbyee/Contract Service Employee
Housing Assistance Subcommittee
July 5,2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz, County of Santa Clara, Social Services Agency;
Jane Decker, Deputy County Executive, Acting Chairperson
Staff:
^
Ray Villarreal, Housing Coordinator
1. Review of Minutes from 6/14 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Mission Statement- By consensus the subcommittee directed staff to draft a
Mission Statement for consideration and approval at their next meeting.
"The housing crisis in Santa Clara County impacts all local public institutions and
jurisdictions severely limiting our ability to recruit and retain high quality public
employees. This greatly affects the quality of services provided by local governments
including critical services like public health, safety and education. We believe it is
necessary and appropriate for the County to take a leadership role bringing together
local public institutions and jurisdictions to address in a meaningful way our common
dilemma."
"It is the mission of this Subcommittee to forward recommendations to the SCO
Board of Supervisors implementing Countywide housing assistance programs
and polices designed specifically to recruit and retain high quality public
employees and contract service employees throughout Santa Clara County".
3. Developing Recommendations- The subcommittee began sifting through
strategies and ideas developed in previous brainstorming sessions and organizing
them into clear recommendations with short term and long term focus.
^ Recommendation #1 -Short term: The County should coordinate a
countywide Housing Services Education Program for all public employees
and contract service employees in the county.
a. The County should seek the support from all local institutions and
jurisdictions;
b. The County should seek support from California PERS and STERS;
c. Housing Services Education should include information and training in
rental assistance programs and services and homebuyer assistance
and services available throughout the county;
d. The County should develop a Housing Services web site that provides
information on rental and affordable housing programs and
assistance;
e. The County should seek the collaboration and support from all local
nonprofits that are providing these services.
^
Recommendation #2- mid-long term: The County, in partnership with
other local jurisdictions, should explore the feasibility of establishing
countywide housing assistance programs for public/contract service
employees.
1) Possible homeownership programs
a) Down payment assistance
b) Monthly mortgage assistance
c) Credit enhancement
d) Closing costs assistance
e) Below Market Rate Housing Development
f) Higher qualifying ratios
2) Rental Assistance programs
a) Security Deposit Guarantee
b) Credit Enhancements
c) Below Market Rate Developments
^
Recommendation #3- mid-long term: The County should explore the
feasibility of lobbying for the creation of state and federal tax incentives to
induce property owners and developers to provide below market rate
housing.
^
Recommendation #4- mid-long term; The County should explore other
incentives to require property owners, developers and businesses to provide
below market rate housing:
1) Inclusionary zoning and other land use incentives
2) Commercial development fees
1.
Direction to Staff- Staff was directed to organize information into consistent
groupings for development into focused recommendations at our next meeting.
2.
Next Meeting -The next meeting of the Subcommittee will be July 19, 2001 at
the County Building in the 7'^ Floor conference room.
Meeting Adjourned at 4:15 p.m.
Public Employee Housing Assistance Subcommittee
June 14, 2001 Meeting
MINUTES
\
Meeting began at 2:35 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Alliance for Community Care;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Tom Fink, ATU-Local 265
Cyndy Amado, Local 535 Member, SSA
Christine Baucus, ESA Human Resources
Staff:
Jane Decker, Deputy County Executive, Acting Chairperson
Ray Villarreal, Housing Coordinator
1. Jntroduction of Chair-Acting Chairperson, Jane Decker, opened the meeting by
announcing Roger Barnes had agreed to chair the Subcommittee.
2. Review Minutes - Chairman Barnes reviewed the minutes and actions taken from
the previous Subcommittee meeting.
3. Subcommittee Experience/Resources: The subcommittee discussed the various
resources and experience members can bring to the table to employ on behalf of the
subcommittee's efforts.
• Teacher Monthly Mortgage Assistance Program -Fremont Union High School
District;
• Teacher Down Payment Assistance Program-Fremont Union High School District;
• Experience in forming partnerships with cities (Cupertino, Sunnyvale, San Jose)•
•
•
•
San Jose Unified School District;
Neighborhood Housing Services Silicon Valley
City of San Jose - Teacher Homebuyer Program
City of San Jose - Considering city employee housing assistance
ATU Local 265- working with VTA to provide employee rental payment assistance
4. Stakeholders - The Subcommittee brainstormed and identified key stakeholders,
ihcluding those that would benefit from housing assistance and those that have
resources to provide.
Beneficiaries:
^ Public Employees;
Nonprofit employees contracted with County to provide health and
human services;
^ All Local Governments- benefit by keeping aiid recruiting quality
employees
^ Recipients of nonprofit services
^ Development Community
Resource Providers- Land & Financing:
^ Local Governments
♦ Higher Densities
♦ Mixed Use
♦ Inclusionary Zoning -Set aside affordable units for public erhployees
♦ Research 6upertino Inclusionary Zoning Ordinance (Corr)
♦ Create Special Tax(s) District for Housing
♦ Tax commercial/industrial developments to be used for affordable
housing projects -"Deal with jobs/housing imbalance"
School Districts - provide bond financing and surplus land
^ State Agencies- provide bonds, homeownership programs, development
funds
■/
^
^
^
Special Tax Districts (i.e., VTA, Water District, Sanitation District etc.,)
Developers
Federal Government - HUD, Fannie Mae Programs
Pension Funds - PERS, STERS
Taxpayers
^ Housing Trust
Foundations
5. Determining Needs - The subcommittee determined the greatest needs of the
County are: ^
•
Available Land
•
•
•
•
•
Financing
Information campaign to mitigate "NIMBYism" and educate public on affordable
housing benefits
Cooperation between agencies
Adequate services to support housing development
Legal clarification of Fair Housing Laws
•
DATA - including local economic studies, salary levels, turnover rates, vacancy
rates, housing costs, caseloads, anecdotal information
•
Define what public employees really want and need - (City of Sunnyvale did a
survey of their employees)
6. Next Meeting
• July 5, 2001 at County Building
• The subcommittee determined their future meetings to be as follows: July 5, July
19, August 2, August 9(if needed)
Meeting Adjourned at 4:15 p.m.
Public Employee/Contract Service Employee
Housing Assistance Subcommittee
July 19,2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Gene Lpnginetti, Fremont Union High School District;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Dennis Mill, Alliance for Community Care
Paul Wysocki, Overall Project Coordinator
Staff:
Ray Villarreal, Housing Coordinator
1. Review of Minutes from 7/05 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Message from Project Coordinator- Overall project coordinator Paul Wysocki
spoke to the subcommittee and discussed the project status, the status of the other
subcommittees and a timeline for future developments.
3- Mission Statement-By consensus the subcommittee approved the attached
Statement of Purpose and Mission Statement for inclusion in their final report
4. Review of Strategy Groupings- The subcommittee reviewed and discussed
strategy groupings as developed by staff from previous subcommittee discussions and
brainstorming sessions. Committee members will forward any additional thoughts, or
new ideas on the strategy groups for inclusion in the final draft to be presented to the
subcommittee at the August 2, 2001 meeting.
5. Next Meeting -The next meeting of the Subcommittee will be August 2, 2001 at
2:00 pm in the County Building in the 11''^ Floor conference room.
6. Meeting Adjourned at 4:05 p.m.
Public Employee/Contract Service Employee
Housing Assistance Subcommittee
August 2, 2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Gene LonglnettI, Fremont Union High School District;
Chuck Corr, San Jpse Uniflecl School District;
Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz
Jane Decker, Deputy County Executive
Staff:
Ray Vlllarreal, Housing Coordinator
1. Review of Minutes from 7/19/01 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Review of Strategy Groupings- The subcommittee reviewed and discussed
strategy groupings as developed by staff from previous subcommittee discussions and
brainstorming sessions. Committee members approved the attached report for
presentation to the Housing Task Force.
3. Next Meeting - None scheduled at this time.
4. Meeting Adjourned at 4:05 p.m.
SANTA CLARA COUNTY HOUSING TASK
FORCE;
SPECIAL NEEDS HOUSING
Santa Clara County Housing Task Force
Special Needs Housing Subcommittee
Final Report
August?, 2001
Co-Chair-Will Lightbourne, Santa Clara County Social Services Agency
Co-Chair- Frank Motta, Corporation for Supportive Housing
Sheri Burns, Silicon Valley Independent Living Center
(
Barbara Serna
Consuelo Collard, Santa Clara County Social Services Agency
Diana Kalcic, Santa Clara County Social Services Agency
Bob Campbell, Project Match
Sharon Miller, St. Josephs Cathedral
Mike Weinstein
Jeffrey Hare, Attorney at Law
Sharon Rea, Santa Clara County Public Guardians Office
Edith Sona, Santa Clara County Department of Drugs and Alcohol
Dennis Mills, Alliance for Community Care
Yolanda Engiles, Christian Housing Alliance Ministry
Izi Chan, Santa Clara County Foster Care Service
Kristie Kesel, Housing For Independent People
Denise Scovel, Innvision
Melina Jovanovic, Immigrant Action Network
Lisa Merlin,
Corky Gutierrez, Santa Clara County Mental Health Department
Sandy Perry, Christian Housing Alliance Ministry
Rebecca Elliot, Innvision
Bonnie Bamburg, First Community Housing
Mark'Lazzarini
Dan Wu, Catholic Charities
Sandy Decker, Los Gatos City Council
Rex Painter, American Red Cross
Staff: Ray Viliarreal, SCC Housing Coordinator
Special Needs Housing Subcommittee
Final Report
August 7, 2001
Problem Statement
Santa Clara County Is In the midst of a severe housing crisis of unprecedented
proportions. The housing shortage and consequent high cost of housing affect all of
us, but those particularly vulnerable are the very low and extremely low-income special
needs populations, most of whom are served by County agencies.
"The housing problems faced by special needs populations are complex. Many inter
related factors contribute to the crisis including; a lack of resources at the Federal and
State levels, a lack of coordination between jurisdictipns, developers and service
providers, restrictive and sometimes contradictory regulatory requirements, and of
course political considerations("NIMBYism"). Costly to build and provide services for,
a
and politically difficult to rally around; low income housing for special needs individuals
and families is a difficult burden for any single jurisdiction or agency to tackle."
The latest^housing cycle has exacerbated the crisis, driving rents literally beyond the
means of special needs individuals and families living on meager or fixed incomes.
Worse still, the high cost of housing, even substandard housing, is beyond the abilities
of the County and service providers to make up the housing cost shortfall in assistance.
Service providers, shelter operators and County housing staff report that overall
countywide housing service capacity is dwarfed by the ovenA/helming demand. The
convergence of rising housing costs, declining inventory and overwhelming demand
has given rise to the dilemma of escalating impoverishment and homelessness of
special needs persons and rising costs of providing necessary housing and social
services.
The County, however, through the efforts of the Housing Task Force is now in a unique
position to take a leadership role and bring together local jurisdictions, developers, and
service providers throughout the county to address the housing crisis in unified and
meaningful way.
Statement of Purpose
The purpose of the Special Needs Housing Subcommittee is to recommend ways for
County government to take a proactive, leadership role in the community, supporting
/
and advocating for the development of very low and extremely low-income housing
combined with appropriate services for special needs populations.
Scope of Work
The Subcommittee agreed that the recommendations and proposed services put
forward in this report are intended for all special needs individuals and families living in
Santa Clara County as identified by the subcommittee (See Attachment 1).
Mission Statement
The Subcommittee envisions County government providing the necessary political
leadership and resources to ensure adequate housing and services for special needs
individuals and families is available throughout the county. The Subcommittee believes
it is the County's role to advocate that special needs individuals and families can live
productive, successful lives when permanent affordable housing with appropriate on
going services are available.
Short Term Recommendations:
1) Objective: The County will take a proactive, local leadership role becoming the
primary advocate for developing very low and extremely low-income housing
throughout the county for special needs clients. The County should:
> Become a facilitator of developments for special needs housing by bringing together
county resources, cities, developers and service providers;
> Work towards changing local land use policies to include more special needs
housing components;
> Advocate linking local land use approvals and funding assistance with tradeoffs
benefiting affordable housing developments with appropriate services for special
needs populations;
> Advocate attaching to core business functions of the local economy (in lieu fees,
exaction's, etc.,) the financing of affordable housing and/or housing services for
special needs populations;
> Advocate that all government surplus lands (or proceeds from the sale of) be
dedicated to the development of very low and extremely low-income housing;
> Provide resource development and grant writing assistance to County agencies and
housing and service providers to facilitate the development of more low-income
housing;
> Work to ensure Community Development Block Grant funds are allocated to meet
County low-income housing objectives;
> Evaluate potential revenue sources that could be used for the development of more
low-income housing and explore ways to establish a permanent source of funding.
1) Objective: The County will take a proactive leadership role at the state and
federal levels of government for developing very low and extremely lowincome housing throughout the county for special needs clients.
> Advocate for more resources and incentives in high cost areas to encourage the
development of very low and extremely low-income housing;
> Work with various local funding sources, as well as state and federal agencies on
developing flexible conditions and requirements on the use of funds for Special
Needs Housing;
> Work with various local funding sources, as well as state and federal agencies on
developing consistent reporting requirements on the use offunds for Special Needs
Housing;
> Request our state delegation to lead a large-scale effort to review and refbrm state
licensing requirements and code.
1) Objective: The Board of Supervisors will create within County government an
Affordable Housing Unit td coordinate and support new and existing County housing
service efforts, acquire new resources, gather and manage housing data and insure
all departments are working together using resources efficiently. The County
should:
>: Task the housing unit to coordinate the special needs housing efforts
undertaken by the separate agencies and departments;
> Develop the means for acquiring and managing critical data relative to the
housing needs of special needs populations throughout Santa Clara County;
> Develop a standardized Intake systern among County agencies to better
determine the housing needs of County clients and facilitate effective housing
placement;
> Support the development and dissemination of an Information data base on
available units or beds for special needs Individuals;
> Make County housing information easily available to the service operators,
developers to assist them in acquiring funding;
> Make County information available to cities and the community at large to
demonstrate the severity of the problems faced by special needs populations.
Mid-term Recommendations:
1) Objective: The County^and Cities wiii estabiish a countywide Housing
Advisory Commission(MAC)as a regional forum for discussing and acting on
the entire spectrum of housing issues. The HAC should:
> Establish countywide inter-jurisdictional housing agreements for the creation of
special needs housing development and/or services;
> Establish inter-County relationships relative to special needs housing and services
issues;
> Establish a countywide Land Bank, comprised of surplus land and financial
contributions of all local jurisdictions, to be administered by the HAC or other non
profit agency,for the single purpose of building and rehabilitating low, very low and
extremely low income housing;
> Work with cities on siting appropriate special needs housing projects on surplus
government owned lands, or on County unincorporated land;
> Work with cities on expediting development of special needs housing projects by
seeking waivers or variances on LAFCO rules, transportation services rules, density
rules etc.;
> Develop countywide housing goals for special needs populations based on needs
assessments and inventory data, and advocate for regional support to meet those
goals;
> Develop a countywide Housing Action Plan to comprehensively address the housing
needs of all Santa Clara County residents, and enlist regional support for the
implementation of this plan.
1) Objective: The County will seek "best practices" in Special Needs Housing
management.
> To insure County agencies and clients are getting the best housing services
possible, the County should explore ways to encourage and reward successful
programs.
> The County should explore different community based special needs housing
models to find innovative designs that would be effective in Santa Clara County.
Long Term Recommendations:
1) Objective: The County will establish a Special Needs Housing Assistance
program for special needs clients.
> The County Special Needs Housing Assistance program should provide funds that
service providers and special needs individuals could utilize in the short term:
a) For assistance in between housing changes;
b) For down payment assistance:
c) For emergency rental assistance;
/
> The County Special Needs Housing Assistance program should provide service
operators and special needs individuals with rental and housing information
services, including;
a)
available assistance programs in the County and at the state and
federal levels;
b)
information on available units for special needs individuals;
c)
rental readiness training;
d)
Life skills training.
1) Objective: The County will establish a Special Needs Housing Development
program for issuing permits to build very low and extremely low income
housing with services. The Special Needs Housing Development program
should:
> Issue permits for appropriate Special Needs Housing projects on County owned
land, or on County unincorporated land;
;
> Utilize all surplus County lands (or proceeds from the sale of)for the development
of very low and extremely low-income housing with services for special needs
individuals and families;
> Become an insurer or guarantor of financing from public or private sources for
appropriate Special Needs Housing projects;
> Establish a revolving loan fund that nonprofit developers could utilize to secure land
while additional financing is pursued.
> Establish a rental housing assistance fund that developers can utilize to buy down
rents and help finance the development of projects for special needs clients.
> Provide "catalyst financing" to assist Special Needs Housing developers at critical
points in the project.
y Leverage "service contracts" to help finance Special Needs Housing projects.
Special Needs Housing Subcommittee
June 6, 2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Sheri Burns, Barbara
Serna, Consuelo Collard, Diana Kalcic, Bob Campbell, Sharon Miller,
Mike Weinstein, Jeffrey Hare, Sharon Rea, Edith Sona, Dennis Mills,
Yolanda Engiles, Izi Chan, Kristie Kesel,
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Purpose of the Committee - Co-Chair, Will Lightbourne opened the meeting by
reading a letter from Supervisor Beall explaining the purpose of the Special Needs
Housing Subcommittee is to develop specific short and long term strategies which the
County can employ to address the housing crisis of persons with special needs.
2. Work Plan - The Subcommittee reviewed a straightforward work plan to produce a
report for presentation to the full Housing Task Force in September. Those steps
include:
Defining the Problem
a. Conducting a preliminary heeds assessment
b. Identifying and examining barriers to providing special needs housing
c. Reviewing current reports, or examples of what other jurisdictions are
doing
d. Determining short term and long term strategies/recommendations
e. Producing a final Report
3. Special Needs Populations Defined - The Subcommittee brainstormed on who
comprise special needs populations and their problems (Please see attachment for
list).
4. Defining the Need - The Subcommittee next addressed the housing needs of the
special needs populations.
a. There is a need to "decongest" the system. How do we make the
system flow?
b. There is a need for more special needs housing:
1) low income housing - client pays full rents
2) permanent subsidized housing - partial rents
3) permanent supportive housing
c. There is a need for the County to better manage and direct its
resources towards special needs housing.
d. There is a heed for better and focused data on the scope of the
problems faced by the speclal needs populations.
e. There is a need for better and focused advocacy at the federal and
state level, as well as locally.
f. There is a need for iand to build special needs housing.
g. Special Needs Housing development must be sensitive to the unique
needs of different special needs populations.
5. Strategies - The Subcommittee discussed strategies for addressing identified
needs.
a. The County should make ^its' surplus land (or proceeds from the sale)
available to nonprofit developers to develop low income housing,
including special needs housing with services, if County resources
are being used there is an obligation that special needs housing be
given 1®! priority.
b. The County should deveiop a system for acquiring, managing and
making available special needs populations' data, as weli as special
needs housing data. The County could become a "Clearinghouse"
and disseminator of vital data.
c. The County should consider requesting our state delegation to get
behind a large-scale effort to review and reform state licensing
requirements and code.
1) Are licensing issues getting in the way of providing additional
housing opportunities?
2) Is there a better model, a rational standard for licensing?
d. The County should take a local leadership role, advocating for special
needs housing.
6. Additional Resources to Consider -The Subcommittee agreed to consider the
foilowing resources for additional ideas:
a. SJ Mayors Task Force on Homelessness
b. Housing Choices - Report on Developmentally Disabled Needs in
see
c. Corporation for Supportive Housing - analysis of costs of housing
special needs persons vs. housing in an institutional setting
d. see Supportive Housing Initiative
7. Additional Participants - The Subcommittee requested staff to invite local
nonprofit developers to attend next meeting for discussions regarding special
needs housing deveiopment.
8. Next Meeting -June 19,2001 at 1:30 p.m., 11®^ Floor Conference Room.
9. Meeting Adjourned at 4:00 p.m.
Special Needs Housing Subcommittee
June 19, 2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Consuelo Collard,
Diana Kalcic, Bob Campbell, Edith Sona, Dennis Mills, Kristie Kesel,
Denise Scovel, Melina Jovanovic, Lisa Merlin, Corky Gutierrez
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Review June 6**' Minutes- The meeting opened with a review and discussion of
the June 6'^ minutes. Discussion ensued over the definition of special needs housing
types.
a. Special Needs Housing was defined as the following;
1) safe and stable over the long term;
2) with options ranging from independent living to some connectivity to
services;
3) Affordable to those eaming less than 30% of area median income.
b. Key issues relative to Special Needs Housing were identified as:
1) Broad and diverse populations with varying needs;
2) Broad and diverse housing types are needed to accommodate the
populations including funds to keep what housing is available affordable.
f
2. Barriers to Providing Special Needs Housing - The Subcommittee brainstormed
on what barriers exist to providing additional special needs housing.
a. Land
b.
c.
d.
e.
f.
g.
h.
i.
j.
Financing
Means to retain affordable housing for special needs populations
Lack of coordination between County agencies
,
Lack of coordination between Service providers and County agencies
Lack of commitment by County to increase affordable housing options for
special needs populations
Lack of coordination/communication between cities and counties
Lack of coordination/communication between service providers and
developers
Lack of community support-NIMBYism
Lack of state/federal and County communication and coordination
k. Formulaic bias at the State and Federal levels of funds distribution
I. Projects in SCC require a variety of funding sources and each has
conditions that may or may not be compatible
m. Lack of readiness of typical SNH clients
n. Language and cultural barriers to providing services to all in need
0. Perception of "Silicon Valley" as the "Land of Only the Wealthy"
p. Lack of ownership and commitment by the community to solve the housing
crisis
q. Lack of public campaign to promote the benefits of special needs housing in
the cities
r. Lack of cooperation between service providers
s. Lack of Section 8 Vouchers
3. Strategies - The Subcommittee continued its'discussion of strategies for
addressing identified needs and barriers from the previous meeting.
a. "Since we can't do it on public funding alone, we must attach financing of
affordable housing and/or housing services for special needs populations to
core business functions of the local economy."
b. The County and Cities should establish countywide inter-jurisdictional
housing agreements for the creation of special needs housing development
and/or services.
c. The County and Cities should establish a Countywide Housing Advisory
Commission as a regional forum for discussing and acting on entire spectrum
of housing issues
d. The County should establish inter-County relationships relative to special
needs housing issues.
e. The County should take a leading role, bringing together cities, developers
and service providers, facilitating land use decisions that include special
needs housing components."We must link local, public approvals of land use
with tradeoffs benefiting affordable housing development and/or services for
special needs populations".
f. The County should establish a rental/housing assistance fund that service
providers can utilize in the short term to assist disabled or semi-disabled
persons in between housing changes. Over the long term the funds would be
utilized to "gap" finance housing services of special needs individuals^
4. Next Meeting - The Subcommittee requested staff to invite local nonprofit
developers to attend next meeting for discussions regarding special needs housing
development.
^
^
5. Next Meeting - July 11, 2001 at 1;30 p.m., 1
'
Floor Conference Room.
6. Meeting Adjourned at 4:20 p.m.
Special Needs Housing Subcommittee
■
July 11,2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Bob Campbell, Edith
Sona, Kristie Kesel, Lisa Merlin, Corky Gutierrez, Jeffrey Hare, Yolanda
Engiles, Izi Chan, Rebecca Elliot, Bonnie Bamburig, Mark Lazzarini, Dan
Wu,Sandy Decker, Sandy Perry, Sharon Miller,
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Review June 19® Minutes - The meeting opened with a review and discussion of
the June 19® minutes.
2. Barriers to Providing Speciai Needs Housing -The Subcommittee had an open
ended question and answer session with several representatives from nonprofit
housing development corporations.
identified Barriers to deveiopment:
a. Finding available, suitable (near services) land and beihg able to pull
together financing quickly enough to purchase it.
b. Subsidies for Special Needs Housing are significant and require weaving
together multiple funding sources from multiple agencies with multiple
conditions and requirements on how those funds can and cannot be used.
Often times those requirements are at odds or contradictory.
c. Permitting process and requirements is difficult for SNH developers to
comply with.
d. Politically difficult for cities to deflect NIMBY pressures and justify exorbitant
subsidies required for developing very low and extremely low-income
housing.
Identified Strategies
a. The County should consider the feasibility of issuing permits for appropriate
Special Needs Housing projects oh County owned land, or on County
unincorporated land.
b. The County should partner with and work with cities on siting appropriate
Special Needs Housing projects on County/City owned lands, or on County
unincorporated land.
c. The County should partner with and work with cities on expediting
development of Special Needs Housing projects(on County/City owned land,
or on County unincorporated land) by seeking waivers or variances on
LAFCO rules, transportation services rules, density rules etc.
d. The County should work with various funding sources, including state and
federal agencies on developing flexible conditions and requirements on the
use of funds for Special Needs Housing.
The County should work with various funding sources, including state and
federal agencies on developing consistent reporting requirements on the use
of funds for Speciai Needs Housing.
f. The County should consider the feasibility of becoming an insurer or
guarantor of financing from public or private sources for appropriate Special
Needs Housing projects.
g. The County should establish a rental housing assistance fund that service
providers can utilize for down payment assistance and developers can utilize
to buy down rents and help firiance the development of projects for special
needs clients.
h. The County should explore the feasibility of providing "catalyst financing" to
assist Special Needs Housing developers at critical points in the project.
i. The County should consider leveraging "service contracts" to help finance
Special Needs Housing projects.
Identified County Role
a. The County should become a recognized, proactive force countywide for
Special Needs Housing development, directing surplus lands, resources and
funds to the extent possible towards Special Needs Housing development.
b. The County should empower the Housing Coordinator to facilitate Special
Needs Housing development partnerships between the County, cities,
developers, service providers and funding sources, always pushing the
development process forward to completion.
c. The role of the Housing Coordinator is as follows;
1) To serve as the County advocate for special needs housing;
2) To establish partnerships with cities, nonprofit developers, service
providers and funding sources;
3) To manipulate resources and funding for the development of special
needs housing;
4) To utilize appropriate rneans available to preserve existing Special
Needs Housing.
d. The County should establish a Countywide Housing Advisory Commission to
work with the Housing Coordinator to develop quantifiable development
goals.
3. Review of Existing Reports- The Subcommittee reviewed the
"Recommendations" section of the Supportive Housing Initiative. It was the consensus
of the group to support the recommendations without further comment.
4. Staff Direction - The subcommittee directed staff to organize the information
developed from the brainstorming sessions into consistent groupings around comrhon
objectives.
This draft will be reviewed arKi reworked by the subcommittee at our ndxt meeting and
form the basis for the Subcommittee's report to the Housing Task Force.
6. Next Meeting - July 31, 2001 at 1:30 p.m., 11*^ Floor Conference Room.
'
\
6. Meeting Adjourned at 4:20 p.m.
Attachment #1
Special Needs Housing Subcommittee
Definition of Special Needs Population
a. Homeless indivicluals and families
b. Elderly including;
1) physically and financially abused
2) mentally ill
3) frail and disabled
4) homeless
c. Abuse Victims
1) children
2) adults, families
d. Mentally III persons
1) adults
2) families with children
e. Developmentally Disabled
f. Physically Disabled
1) Victims of Traumatic Brajn/Spinal Injury
2) Other physical disabilities and/or injuries
g. Persons with Health Disabilities
1) Persons with HIV/AIDS
2) Victims of Organic Brain Syndrome (dementia, alzheirrier's)
3) Other health or medical related disabilities and/or injuries
h. Foster Care families
1) foster parents
2) Families/relatives trying to reunify with children
3) Aged out foster care young adults
i.
Criminal Justice clients
j. state Hospital clients
k. Substance Abusers
I.
CalWorks clients
m. Persons with Extremely Low Incomes(ELI) living at or below the
federal poverty level.
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VIII
REGIONAL HOUSING ACTION PLAN COMMITTEE
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Summary Report
Wednesday, May 30 & Friday, June 1,2001
Participants: [5/301: Alyson L. Abramowitz, Chris Block,Bob Brownstein, Candy Capogrossi,
Tracey Chew, Steve Glickman,Poncho Guevara, Art Henriques, Bill McWood,Dunia Noel,
Christy Paul, Maria Romero-Aranda, Paul Stewart, Ray VilWreal, Gertrude Welch, Billie & Saul
Wachter, Heidi Wolf-Reid. [6/1]: Chris Block, Larry Boales, Bob Dougherty, Poncho Guevara,
Ron Johnson, Kevin Malone, John Ordonez, Louie Rocha, Ben Spero, Greg Tomkins.
Goals of Countv Housing Task Force:
• Craft a Comprehensive Countywide Plan to determine what the needs are, what new
resources are necessary,^d how these resources can be identified, generated, and obtaii^.
• Identify existing initiatives underway in the region
• Recognize and integrate the current housing activities ofCounty Departments as well as those
ofthe Housing Trust and the County Executive's Office.
• Components will focus on the housing needs oflow-income, special needs populations and
County workforce.
• Consider the creation ofan Alfordable Housing Land Trust.
• Identify surplus Coimty property for affordable housing development.
Guiding Pripciples for the Countv Housing Task Force;
•
•
•
•
Define the problem/need
Identify and develop strategies using short, medium, and long-term goals
Consider resources and barriers, especially as they apply to Santa Clara County
Objectives must be focused and quantifiable
• Recognize the County's role in housing production, creation, and preservation
• Recognize the work ofothers and build upon that
Role of the Regional Housing Action Plan Committee: Committee members identified how we
define successfrom this process
• Define and recommend a Countywide, comprehensive action plan to be presented to the
County for ratification
• Define a bold visionfor housing that looks at housing issue in all ofits complexity that is
tenqjered, but not limited, by what we perceive we can accomplish.
• The plan will be Justified based on a defensible analysis ofneed and resources
• The plan will include clearly defined strategies(short, intermediate and long-term) and who is
responsible for implementii^ each strategy.
V ■ / )a
• Establish aframeworkfor long-term involvement, supporting the development ofa supportive
constituency and enabling the County to take a leadership role
• Create a checklist with evaluation criteria that defines success
Strategies; Committee members identified a preliminary set ofoutcomesfor strategies
• Will include both short-term, high-impact, achievable components to make an immediate
difference to get people housed(24 months)
• Will include long-term objectives that will allow us to envision comprehensive solutions and
address the complexity ofthe issues(5-7 years)
• Must be action-oriented
• Need a serious reality test to determine which are most effective
• Can bolster the County's role in housing including things that the County can do to encourage
cities to take action
• Must include a middle-class component addressing the broad continuum ofhousing needs.
The Process: The Committee discussed the scope ofthe work needed to complete the process.
There will be three phases.
• First, an eflScient research phase will compile and present information that will lay a
foundation for xmderstanding the issues related to the housing crisis. There are a significant
number ofexisting reports and data sets that examine the housing situation in various ways.
Four workgroups will review the relevant content ofthose reports and identify which pieces
are most useful in a determination ofneeds and solutions. AH workgroup meetings will take
place at the offices of Housing Trust: 111 W.St. John Street, 7th Floor, San Jose.
• Using fiiat information as a baseline, the second phase will involve developing, analy2mg and
prioritizing strategies to be included in the action plan. That second phase will begin with a
"retreat-style" general meeting on July 18th fi-om 3-8:30PM at the Housing Authority. This
work will continue until the next general meeting on August 15th.
• Phase three will synthesize the first two into the final report to the Board ofSupervisors.
The following is a description ofthe focus ofeach ofthe four workgroups in phase one. ^
Included are the issues identifiedfor inquiry, composition and meeting schedule:
A)The Need: An Overview
Focus: Present efficiently the scope ofthe crisis and the real housing need(look at Census 2000
data and existing reports)
Research Issues: Demographics; housing costs(rental rates, home prices); vacancy rates;job
growth; housing production levels; definition ofa sufficient number ofunits; definition of quality
housing; overcrowding (fiunilies per unit); school enrollment; immigration patterns; community
impact ofless home ownership; similar trends in other regions; TANF enrollment; gentrification.
Who: Ron Johnson, Candy Capogrossi, Tracey Chew,Dunia Noel,Ray Villarreal, Gertrude
Welch
When: Thiusday, June 28,6:30PM; Tuesday, July 10,6:30PM; Monday, July 16,6:30PM;
[ifnecessary: Thursday, July 26,6:30PM; Tuesday, August 7,6:30PM]
B)Interrelationship: Regional Issues
■
Focus: Describe the interrelationship Ofhousing to other regional issues:(i.e. land use,
transportation, wages)
Research Issues: Zoning; Tax policy/fiscalization ofland use;jobs/housing imbalance;
r
transportation; wage and income trends; traffic congestion/location ofhousing relative to jobs;
school capacity; environmental impact; infrastructure (water, sewers).
Who: Steve Ghckman,Art Henriquez,Kevin Malone, Bill McWopd,Dunia Noel,Ben Spero,
Paul Stewart.
When: Thursday, Jime 28,4PM;Tuesday, July 10,4PM; Monday, July 16,4PM;
[ifnecessary: Thursday, July 26,4PM; Tuesday, August 7,4PM]
C)Housing: Broadly Defined
Focus: Understand supply/demand imbalance and barriers to housing development:(i.e.
fiscalization ofland use, financial constraints, etc.)
Research Issues: Fumcing constraints; growth controls; regulatory numbers from state (state
guidelines for assistance); NIMBYism;impact ofintensification ofuse(density, municipal
services); development costs;jobs/housing imbalance; tax structure/fiscalization ofland use;
return on housing investment; entropy; lack ofinfrastructure (water, sewers, energy);
coordination between agencies; lack ofincentives to keep housing affordable; limited varieties of
new housing.
Who: Alyson L. Abramoyritz, Larry Boales, Bob Dougherty, Steve Glickman, Art Henriquez, Ben
Spero, Greg Tomkins, Saul & Billie Wachter, Heidi Wolf-Reid
When: Thursday, June 28,6:30PM; Thursday, July 12,6:30PM; Monday,July 16,6:30PM;
[ifnecessary: Thursday, July 26,6:30PM; Thursday, August 9,6:30PM]
D)Affordable Housing
Focus: Understand the specific issues related to affordable housing.
Research Issues: Middle-ineome/lst time homebuyers; special needs; lower-income;
undocumented; seniors; transient(students, weekly workforce); homeless;emergency; attemative
housing (shared, multLgeneration femily).
Who: Alyson L. Abramowitz,Ron Johnson, John Ordonez, Louie Rocha, Maria Romero-Aranda,
When: Thursday, June 28,4PM;Thursday, July 12,4PM;Monday,July 16,4PM;
[ifnecessary: Thursday, July 26,4PM;Thursday, August 9,4PM]
Process Considerations: The Committee was'asked to discuss their thoughts, concerns and
ideas about the process to address any identifiable pitfalls and point us in a constructive
direction as we moveforward.
• A large body ofknowledge currently exists and needs to be analyzed.
• This will be a Coimty report, sent to the Board ofSupervisors for adoption and,therefore, we
will need to coordinate closely Avith Supervisor Beall's office.
•
•
•
•
•
The final report must not be either a "problems report" or a "list ofsolutions"
It is easier to identify problems that viable solutions
Previous processes have lacked:
A clear vision in terms offinal outcomes and products.
A connection to the political /institutional resources necessary to implement them
• Amlytical thinking, wMch is imdermined by "list-nmking"
• A real response to the costs and resources needed to address housing
• Housing lacks an adequate constituency to create the political will that moves elected leaders
and reluctant staffto make housing a resource priority.
• Addressing the housing crisis involves fectors external to local control(i.e.job growth,tax
system)
• Long-time advocates feel the frustration offew successes and lots ofeffort
• Who else needs to be around the table: Cities(elected officials, city managers, planning
department and CDBG stafO» County policymakers and staff, builders/developers, finance
experts,trade associations and community members.
• Hold day & evening meetings when possible
• Ask for Written comments
.
Next Steps; Committee members committed to help secure copies ofreports and data, which will
be compiled by staffin anticipation ofthe workgroups. That infopmation will be disseminated at
next generalmeeting on Wednesday, June 27at6:30PM at the Housing Authority(505 W
Julian St. San Jose). Workgroups will begin meeting thefollowing dcy, Thursday, June 28th at
the Housing Trust offices(111 W St John Street, 7th Floor, San Jose)
SANTA CLARA COUNTY HOUSING TASK FORCE:
REGIONAL HOUSING ACTION PLAN
COMMITTEE:
RESEARCH PHASE
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee
Research Phase Working Groups
Documents reviewed for Working Group Packets [June 20011:
1.
2.
The Right to Housing. Institute for Policy Studies Working Group on Housing
Looking to a Higher Authority: Can the State Help Solve Our Housing Problems? Santa
Clara County Planning Office
3. Housing LA
4. Growth Projections for Santa Clara County 2000-2020. ABAG
5.
Conditions and Trends in Santa Clara County. ABAG
6.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues 5-Year Plan
(Draff)
7.
Building Sustainable Communities: Housing Solutions for Silicon Vallev. Silicon Vallev
Manufacturing Group and Greenbelt Alliance
8. Silicon Vallev Projections 2000. Silicon Vallev Manufacturing Group
9. Not Safe At Home. The Doc4Kids Project. Boston Medical Center
10. Obsess: Whv the Bay Area CanT Stop Talking and Thinking About Real Estate, bv Bonnie
Wach
11. Housing in California, Controller's Quarterly
12. Raising the Roof: California Housing Development Projections and Constraints 1997-2020.
(California Department ofHousing and Community Development. Mav 2000
13. Draft Compact for a Sustainable Bay Area, Bay Area Alliance
14. Joint Venture's 2000 Index of Silicon Vallev
15. Joint Venture's 2001 Index of Silicon Vallev
16. Bridging Borders in Silicon Vallev: Summit on Immigrant Needs and Contributions. Santa
Clara County Office on Human Relations
17. In Short Supply: Recommendations of the Los Angeles Housing Crisis Task Force. Mav
2000
18. Everyone's Vallev: Inclusion and Affordable Housing in Silicon Vallev. Working
Partnerships. Mav 2001
19. Santa Clara County Consolidated Plan 2000-2005. Mav 2000
20. City ofSan Jose Consolidated Plan. 2001 Annual Action Plan
21.
22.
23.
24.
ABAG Projections on Housing Need
Vallev Transportation Plan 2020
Locked Out: California's Affordable Housing Crisis California Budget Project Mav 2000
Census 2000 data(what is available)
25. Further Concerns Regarding the Low-Income Housing Crisis in r.ahfnmia bv Radha
Bhattacharva. Dept. ofEconomics. California State University. Fullerton April 2001
26. Stilled Locked Out, California Budget Project. March 2001
27. San Jose Mercury News. June 26. 2001
28. Santa Clara County Collaborative on Affordable Housing and Homeless Issues Gaps Analysis
29. Other sources as cited
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING NEED
prepared by:
Susan Silveira
Springboard Consulting
Housing Need
The State Picture
Renters Face the Greatest Affordability Challenges
Over four out often(43 percent) ofall California households are renters, and renters face
the greatest affordability challenges. In 1997, nearly a quarter ofthe renter households in
the state's metropolitan areas(1 million out of4.2 million households) spent more than
halfoftheir incomes on rent. A total of2 milhon renter households paid more than the
recommended 30 percent oftheir incomes toward shelter. All indications suggest that the
situation has grown worse over the past three years.'
After accounting for federal. State, and local housing assistance, 3.1 milhon California
households still paid more than 30 percent oftheir incomes for housing in 1995. Nearly
two-thirds(65 percent) oflow-income renters paid more than halftheir income for
housing in 1997 and 86 percent spent over the recommended 30 percent oftheir income
on housing.^ Altogether, 2.4 million low-income California households overpaid for
housing in 1995.'*
The number of Califomians in need of affordable housing far outstrips the supply oflow
cost units. In 1997, the number oflow-income renter households in the state's
metropolitan areas exceeded low cost rental units by 2.1 -to-1, a gap of684,000 units.
Over the past decade, the cost ofrental housing has risen faster than inflation in the state's
two largest metropolitan areas and faster than the incomes ofthe average California
femily. Rental housing costs increased 14 percent in Los Angeles and 38 percent in San
Francisco between 1989
M«(iy
R«n1«f« f4t« Signik^iil HoutinQ C9«l6u(d«i»
and 1998, while the
income ofthe median
Nentan Payinq C>v«
Renters Payinq O/cr
3OV10I th«ii bKom*
SOS ot their income
lewvd llAU&in^
renter household
toward Housing
P*tc«nt4q»
Nunik*!
Percentage
and the median income of MfVopoMsn Calfhrria (199^]
47%
1 ,%99riCI
24%
renter households with
63%
178230
24%
82;:00
2S%
434.1GG
increased by 9.6 percent
Amiheim-Sartf Aiia i}994)
Numbei
children increased 6.3
Loa Angebs-Lonj Beach(1997l
51%
aiefioo
percent.^
Oskt^rid(i998i
43%
148,100
22%
7e.4(]c
is&mo
23%
as^ori
River»ide-San BeitiarciinD (199i)
47%
iQimo
21%
46;:DD
SanDivgo (1994]
66%
216.700
20%
103 OGU
SanFranckco ii1999i
42%
141 900
21%
73£CC
4^%
i"Rm
21%
4.3,= T
£acramefto (1
Fan
■ T!
Stufct: U S Dettirtr ert cl C cr r
BLWWofthe Censie.irfl US Denahmefit giHcuengt eiio Urti» i
usvdis^mBn:. Kitaican Housro &
'Locked Out; California's Affordable Housing Crisis, California Budget Project May 2000
^ Locked Out: CalifOTnia's Affordable Housing Crisis, California Budget Project May 2000
'Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
* Raising the Roof: California Housing Development ProiectiOTis and Constraints 1997-2020, Califwriia
Department of Housing and Community Development May 2000
'
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
® Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Rents Oiflpace Household Incomes
1 r-
* •■9H.
•SH
lUH
•(
-4.5^.
-
Oh
P nrw S
Iwil.
i'»_r
11
CliM-
Statewide, 45 percent of California renters were unable to afford the FMR on a two-
bedroom apartment in 1999. Even in areas where housing costs less, lower incomes make
rents unaffordable. In the rural counties that constitute the state's most affordable housing
markets, where the FMR for a two bedroom apartment is $483 per month, a full-time
worker would need to earn $9.28 per hour to afford the rent — 161 percent of California's
minimum wage.'
Mtiny California Ranters are Unable ta Afford a
Twini Bedieem Apailmeni
•T- f rt*
|«1S
I
IbiH
I
t-v
III iiygi illte W Uwiite »
Fiir
' Locked Out: CalifOTnia's Affordable Housing Crisis, Califania Budget Project May 2000
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a boomii^ economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent of California households owned their own homes in 1999,
con^ared to 66.8 percent for the nation as a whole.®
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent ofhouseholds could afford to purchase the median priced
home in 1999, as compared to 37 percent of California households. Only 27 percent of
the region's households can afford the n^dian priced home in the Bay Area, and even
fewer(23 percent) can afford the median priced home in Monterey County. The median
California household earns less than two-thirds the income needed to purchase the
median priced home.^
Houting
in CiKtoiaia w W«ll Balow Mm Nalwnd
1-^
lou
;aii
tfj
tcB I
«i>
tcta
loitt
* Locked Out: California's Affwdable Housing Crisis, Califcmiia Budget Project May 2000
'
Locked Out: California's Affordable Htmsing Crisis, California Budget Project May 2000
CJlMnU'b Hmbwwdoi*!)^ R««t L<is TIh»»« of th«N44*«
f.'li
_
_
.
.
.-
—
•ji
••
41 ftS
77a
itr-
"s...
..
3
•
«
4.
--
is
IvV:]
i
is\V:1
Vf
S"
...
...
j
...
%
\
\
California's low-income homeowners experience significant housing cost burdens. Over
half(54 percent) ofthe low-income homeowners in the state's metropolitan areas spent
over half oftheir income for housing in 1997."^
California's high home prices make it difficult for renters to become homeowners. The
income needed to purchase the median priced home is more than twice the income ofthe
state's median renter household ($27,401 in 1998). Fewer than one out oftwenty new
homes sold in 1999 were affordable to households with incomes at or below the median
for California renter households.''
Overcrowding Worsens as Housing Costs Rise
According to Census estimates, 1.2 million households lived in overcrowded conditions
in 1990. Rates ofovercrowding for very-low income households range fix)m six to
fourteen times higher than for other households, depending on the metropolitan area.'^
The prevalence of overcrowding nearly doubled between 1980 and 1990, and has
worsened in the last decade. In 1997, 13 percent ofrenter households in the state's
metropolitan areas lived in overcrowded conditions.'^
The single most significant fector associated with overcrowding is the presence of
children in a household. In 1995,40 percent ofthe state's children lived in renter
households that were overcrowded and one ofout six lived in severely overcrowded
households. Not surprisingly, large families are especially likely to live in overcrowded
housing.''*
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, CalifcMmia
Department of Housing and Community Development May 2000
"Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis, CalifcMnia Budget Project May 2000
Lack of Housing Limits Families' Ability to Leave Welfare for Work
A geographic mismatch between high employment growth areas and affordable housing
limit welfare recipients' access to jobs. The wages typically earned by those transitioning
from welfere to work are insufficient to oflfeet increased housing costs in areas where ^
employment opportunities are better.
Current levels ofcash assistance severely limit families' housing options. Based on
current Fair Market Rents,femilies rel5dng on CalWORKs,the state's cash assistance
program for poor families, pay over 60 percent oftheir grant toward housing in all
California counties. California's Welfare recipients are also less likely to receive federal
housing assistance than are welfare recipients in other states. In 1997, only 13 percent of
families receiving AFDC received federal housing subsidies, compared to 23 percent ft>r
the nation as a whole.In feet, California ranks 49th among the 50 states, with only
Michigan having a lower share of welfare recipients receiving housing assistance.
While Seniors are More Likely to Own their Own Homes,Senior Renters Face
Significant Cost Burdens
While the housing cost burdens ofseniors who own their own homes are modest in
comparison to other Califomians, a third ofsenior homeowners pay over 30 percent of
their income for housing. Seniors who rent face significant cost burdens, with 65 percent
paying in excess of30 percent oftheir incomes for rent and 41 percent paying more than
h^oftheir incomes for rent. The high rent burden poses a significant problem for
seniors since they are more likely than younger renters to be living on a fixed income. An
elderly or disabled SSI/SSP recipient would spend over halfofhis or her income for a
studio apartment in 39 ofthe state's 58 coimties.
Substandard Housing
Approximately twelve percent ofthe State's housing stock is in need ofrehabilitation.
Homeless
Although inherently difficult to quantify, California's homeless population in 1997 was
estimated at 360,000 persons, about 1.1 percent ofthe State's 1997 population.'^
Units At Risk
As of 1998, more than 3,200 rental housing projects, encon^assing 185,000 units were at
risk ofconversion throughout California.'^
Raising the Roof: Califomia Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Community Development May 200
Raising the Roof: Califomia Housing Development Projections and Constraints 1997-2020, Califomia
Department ofHousing and Community Development May 200
HOUSmG NEED
Santa Clara County
Ijower Income Households
• Based on 1999 estimates, there are 149,915 adults and 220,754 children living
below the federal poverty level in Santa Clara County.'®
Disabled Persons
• There are 57,919 individuals with a work disability in Santa Clara County. Of
these, 24,823 cannot work due to their disability.'^
• There are 95,000 mentally ill persons in Santa Clara County, halfare on public
"70
assistance
There are 40,863 persons receiving SSI in Santa Clara County.
21
Elderly
According to 1990 US Census data,7% ofthose in Santa Clara County living
below the poverty level are persons over the age of65.^ This suggests that,
based on 1999 population estimates, there are 10,494 persons over the age of65
living below the federal poverty level.^^
Persons with HIV/AIDS
• There are 1,203 persons with AIDS living in Santa Clara County.^"
Agricultural Workers
• There are 3,500-5,500 agricultural workers earning $11,960-$13,000 and only
300 beds at Ochoa provided by the Housing Authority ofSanta Clara County
Homeless
• There were at least 20,000 episodes ofhomelessness by individuals and families
in Santa Clara County over the last year,^®
Veterans
• In the 1999 homeless survey, 19% ofthe respondents were veterans.^'
• As ofJanuary 10, 2000,there are 83,935 veterans in Santa Clara Coimty.^®
Youth
• According to the most recent homeless survey,60% ofhomeless children were
under the age of 12, with 19% between the ages of13-17.^'
US Census Bureau, Santa Clara County QuickFacts
Housing Needs Assessment for Persons with Disabilities: Final Report,Prepared for City of San Jose
Department ofHousing by Vemazza Wolfe Associates, Inc., December 1997, p.8
Hospital Conference ofSanta Clara County, Community Health Needs Assessment for Santa Clara
County. Jime 1996, p. 12
SSI Recipients by State and County, The OfBce ofPolicy, Social Security Administration December
1999.
^ 1990 US Census Data
US Census Bureau, Santa Clara Coimty QuickFacts
^''Santa Clara County Consolidated Plan for 2000-2005 May 9,2000 p 2-44
^ Santa Clara County Consolidated Plan for 2000-2005 May 9,2000 p 2-47,48
1999 Santa Clara County Homeless Suryey Jerome Burstein and Linda Woodsmall September 8,2000
1999 Santa Clara County Homeless Suryey Jerome Burstein and Linda Woodsmall September 8,2000
California Employment Deyelopment Department, Labor Market Information Diyision, Information
Seryices Group.
California, Employment Deyelopment Department, Labor Market Information Diyision, Information
Seryices Group.
• The Emergency Housing Consortium estimates there are as many as 1500
homeless teenagers found in downtown San Jose during the course ofone year.
Domestic Violence
• In 1999,the total percentage ofhomeless women who experienced domestic
violence was 22.6%.^®
Current Inventory of Low-Income Housing
Santa Clara Coimty has approximately 26 emergency shelters, providing 1,020 beds year
round, and 1,270 beds when the armories are opened during &e winter. Nonetheless,
1,000 people are left sleeping on the street on a typical night."'
A recent survey conducted by First Community Housing revealed that there are 223
affordable housing complexes in Santa Clara County providing 22,084 units ofaffordable
housing serving primarily individuals and families with incomes between 50-120% ofthe
County's median income.
According to the recent 2001 Index produced by Joint Venture, the overall development
ofnew housing units fell by more than 50%,from 12,060 in fiscal year 1999 to 5,370 in
fisc^ year 2000. Ofthose units, 31% or 1,600 are affordable housing units. This index
report does not indicate whether these housing units are for rental or ownership housing.
However,there is an implication that these units may represent rental housing affordable
to those making up to 60% of median income.^^
There are 225 wheelchair-adapted imits in the entire county.^ While the precise need for
these types ofunits is not known,the fact that close to 25,000^^ people in this county
cannot work due to a physical disability suggests that more ofthese types of units are
needed.
One ofthe tasks undertaken by the special needs housing advisory working group was to
attempt to ascertain the number ofclients currently receiving housing and housing
assistance fi*om County agencies. The chart on the next page reflects estimates, which
are in some cases yearly or monthly averages. It should be rioted that agencies that
contractfor the provision ofhousing report that all contractedfacilities arefull to
capacity on a daily basis.
Ibid.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues' Five Year Plan (Draft)
June 2001
This number does not include board and care and other types ofhousing that are not apartment
complexes.
Joint Venture's 2001 Index of Silicon Valley prepared by Collaborative Economics, p.19, January 2000.
Santa Clara County Consolidated Plan for 2000-2005 p. 2-38
Housing Needs Assessment for Persons with Disabilities: Final Report,Prepared for City of San Jose
Department ofHousing by Vemazza Wolfe Associates, Inc., December 1997, p. 8
Clients Receivinq Housing Assistance with Services*
from Santa Clara County Agencies
Emergency
Shelter
Transitional
Housing
160
238
Permanent
Supportive
Permanent
Housing
538 (includes 50
41
Mental Health
Mentally Disabled
Shelter Plus Care
Beds)
Alcohol & Drugs
10
Men
5
Women
97
54
59
Families w/Children
50(Shelter Plus
Care)
Family Reunification
35^
-Children
Family & Children's
Services
-
Persons Living with
Developmental Disabilities
50
4
5
Children w/ HIV
Lower Income Households
<50% of median (Family
Unification Program)
187
Youth
Aged Out(18-25)
Runaways
Foster Care
17
102
727
1589
8
312
36
Domestic Violence
7
11
Women
4
Women w/Children
Substance Abusers
Women
62
Recovery Clients
10
5
17
11
6
Mental Health
Children w/ Medical
Needs
TOTALS:
40
21
505
1310
2527
107
* Reflects information obtained during the.working group sessions in Dec. 1999 & Jan. 2001.
* The Department ofAlcohol and Drugs contract for a total of255 transitional beds. Ofthese, 193 have a
length ofstay up to 90 days and 62 beds have a 6-9 month length ofstay.
Housing Authority
The Housing Authority ofthe County ofSanta Clara provides low- income housing and
low income housing assistance for the residents ofSanta Clara County, The following
chart shows the numbers ofclients served through Section 8 assistance, Public Housing
and housing created through the state tax credit program.
Housing & Housing Assistance Provided By The Housing Authority Of Santa Clara
County
Tvoe of Housing/Clients
Program
Number
Served
Section 8 Programs:*
Family Self-SuflSciency
Low-Income Families
Welfare to Work
Shelter Plus Care
Families(100% TANF)
Homeless/Dually-Diagnosed
120
Mainstream
Persons with Disabilities
163
After Care
Persons with Developmental
75
450+
810*
Disabihties
Family Unification Program
Open Child Welfare Cases
Others
Low-Income Individuals/Families
136
9845
11,149
TOTAL:
Other Housing Programs
Number of
Units
Public Housing
Low Income Housing Tax
Credit Program
Low Income Individuals/Families
Low Income Individuals/FamiKes
560
1242
The Santa Clara County Collaborative on Affordable Housing and Homeless Issues
prepares a yearly Continuum of Care Gaps Analysis for the McKinney Homeless Fund
application. According to that document, here is the current inventory ofhousing as it
relates to homeless housing for the purposes ofthis funding application.
Individuals
Families
TOTAL
809
410
1219
Transitional Housing
592
674
1266
Permanent Supportive Housing
438
368
806
1839
1452
3291
Emergency Shelter
TOTAL:
* Section Sassistance is only viable for those special needs clients who can qualify for housing that costs
less than 50% and in many cases less than 30% ofmedian income.
'
This munber will increase to 1066 by June 2001.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues, Continuum ofCare Gaps
Analysis 2001
Low Income Housing Need
The Association ofBay Area Government provides projections ofhousing need based on
an economic analysis ofthe area. Here are their current projections:
Very
Low
Moderate
Above Moderate
Total
5,173
15,659
25,735
57,991
Low
Santa Clara
11,424
County^'
The Santa Clara Coimty Collaborative on Affordable Housing and Homeless Issues must
also report information on the unmet housing need for the homeless in Santa Clara
County for their McKinney Homeless funding application. Here are those current
figures:
Individuals
Families w/Children
Total
Emergency Shelter
381
476
857
Transitional
841
1013
1854
Permanent Supportive Housing
504
1277
1781
1726
2766
4492
TOTAL
Housing Authority WaitingUst
As ofNovember 2000,there were 26,331 persons on the Section 8 waiting list for Santa
Clara County. Ofthese, 3849 are elderly, 4741 are disabled and 4168 identify
themselves as homeless.
There are 6000 persons on the public housing waiting list.
There are more than 41,000 persons on the waiting list for the Low Income Housing Tax
Credit Program.
Mobile Home Residents
Over the past five years there has been a loss of944 mobile home housing units in the
Urban County.
Conversion Tenants
There are 7,726 units oflow-income housing at risk ofbeing converted to market rate
housing.^'
This is a countywide figure, including all cities in Santa Clara County.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues, Continuum ofCare Gaps
Analysis 2001
Santa Clara Coimty Consolidated Plan 2000-2005 May 2000 p.2-50
10
Rising Rents
Average rents increased 26% at turnover in 2000; median household income increased
2%.''°
In one three month period in the year 2000 the rents for vacant apartments shot up by 19
percent in San Mateo County, 18 percent in Santa Clara County and 13 percent in Sah
Francisco County, according to Real Facts, which collects information on apartment
con^lexes with 50 units or more. The vacancy rate fell to 0.6 percent in Santa Clara
County,the lowest rate region-wide since 1996."^^
As ofJune 2000, average rents for one-bedroom were $1,967 in San Francisco,$ 1,973 in
Palo Alto-Menlo Park, $1,415 in San Jose, and $ 1,550 in Santa Clara Coimty. At that
time, an affordable rent(30% Ofgross income)for a low-income household was $620.^*^
Housing Production
The number ofnew housing units approved by Silicon Valley cities fell by more than
50%,from 12,060 in 1999 to 5,370 in 2000.^^^ From 1980 to 1998, Sihcon VaUey added
approximately 154,900 new homes to its current housing supply of579,329 units.
Annual average production rates peaked in the late 1980s, with an average of 11,462
units being added every year from 1985-1990. Annual average housing production
between 1995 and 1999 was only about 7,500 per year.'*'^
To meet demand, California homebuilders would have to construct and average of
220,000 additional housing units each and every year through 2020. Since 1987, new
single and multi-family home production has averaged just 141,000 units per year.'*^
Land
With appropriate reserves being maintained, Los Angeles, Orange and Santa Clara
counties will lack sufficient vacant suburban land to accommodate projected household
growth through 2010/^
The total land supply currently identified in Silicon Valley as having potential for
housing production totals 10,600 acres. Based on current local policy and market
conditions, this land supply could yield over 74,300 new homes. However,this falls well
below projected demand, based on current employment growth projections. The gap
between potential supply and projected demand could be greatly reduced by both
Joint Venture 2001 Index of Silicon Valley
Ibid.
42
Ibid.
\
Joint Venture 2001 Index of Silicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley,Prepared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999 and US
Census Bureau, Census 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Depmtment ofHousing and Community Development May 2000
'Turtho- Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
11
increasing land supply and the number ofhomes built per acre. The current projected
supply ofnew homes in Silicon Valley only meets 50-66 percent ofprojected demand.
Just by increasing the number ofhomes built per acre from the current projected average
ofseven to nine per vacant acre and from 12 to 25 homes per reuse acre, the region could
meet 75-99 percent of demand."*^
Approximately 40 percent ofpotential future housing development in Silicon Valley will
be on land that is currently underutilized, rather than vacant. ^
Halfofthe cities in the Silicon Valley already estimate that reuse sites will provide more
opportunities for new home construction than vacant sites. These cities include San Jose,
Milpitas, most ofthe large cities in northwest Santa Clara County(including Cupertino,
Palo Alto and Sunnyvale), and all ofthe cities in southern San Mateo County,
Plarmers in most Silicon Valley communities acknowledge that they have not done a
comprehensive survey ofpotential reuse sites, and that the potential number ofnew
homes that could he built on these types ofsites will increase significantly beyond current
estimates if cities take better advantage ofreuse opportunities.^
Demand for Home Ownership
Among Bay Area counties, and based solely on projected demographic characteristics,
the incremental demand for homeownership will be strongest in San Francisco, San
Mateo and Santa Clara Counties. Region-wide,the incremental demand for
homeownership units could exceed that ofrental units by a 2.8-to-l ratio. By 2010, given
adequate production, the homeownership rate in Contra Costa County could top 70
percent. Even in San Francisco, where only on in three households is currently a
homeowner,the incremental demand for homeownership will likely exceed the
incremental demand for rental units. Region-wide,the demand for ownership housing in
2010 will exceed 1.7 million.^^
Demand for Rental Housing
Among individual counties, the largest increments ofnew rental construction between
1997 and 2010 will be needed in Los Angeles(+216,000), San Diego (+125,000),
Riverside(+76,000), San Bemandino (+73,000), Orange(+57,000), Sacramento
(+40,000)and Santa Clara(+36,000.)^^
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
™ Building Sustainable Commimities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Raismg the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Community Development May 2000
12
Jobs/Housing Imbalance
More than 70 percent of Silicon Valley's total enployment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Moimtain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo Coimty produced 0.7jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^'*
Over the next 20 years(2000-2020)between 66 and 72 percent ofhousing demand wiU
be in San Jose/Milpitas and northwest Santa Clara County,the same areas projected to
capture approximately 67 percent of Silicon Valley's total new job growth. ^
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s.^^ ABAC reports for 1995-2000 an average countywide ratio ofnew jobs to new
housing units of6 to 1, with the five highest being in Santa Clara, Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
coimtywide ratio ofnew jobs to new housing units of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara, Palo Alto and Moimtain View.^^
Since 1992,jobs have grown four times faster than housing. To keep pace with job
growth, the region would have to build an additional 160,000 units.^® Other estimates
indicate that Silicon Valley will need between 112,039 to 146,366 additional homes
between 2000 and 2020.^^ The San Jose/Milpitas sub-region will generate 44-50 percent
oftotal housing demand,followed by 16-28 percent in northwest Santa Clara County,
and 13-15 percent in southern Alameda County. Southern Santa Clara County, southern
San Mateo County, and southwest Santa Clara County account for approximately 18
percent offuture housing demand.®*'
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the SilicoP
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Commxmities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley, Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
"ABAG Projections 2000
Joint Venture 2001 Index of SUicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley, Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
13
Between 2000 and 2010,the rate ofjob growth in Silicon Valley is projected to
substantially outpace the rate ofgrowth in households(13 percent versus 8 percent).^'
For the third year, Software added the most new jobs.
Since 1992, the first year ofthe regional employment dataset, Silicon Valley has seen a
net increase of more than 329,000 new jobs. The total number ofjobs in the region is
1.35 million.^^
By the year 2004, Santa Clara County will witness the creation of32,000 new jobs in the
traditionally low-wage food service and building maintenance industries and the retail
sector.®'^
Overall employment in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000jobs, including
replacement for the 22,000 jobs the region is estimated to have lost between 1990 and
1995. Over one-halfof alljobs added in the region from 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in Sihcon Valley indicate that the incredible job growth currently being experienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
more between 2010 and 2020, down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
Wages
Average wages in industry clusters continued sharp ascent with Software reaching
$125,000 and Semiconductors $117,000.^®
In 2000,the region's average wage increased 9% in real terms, from $60,800 to $66,400.
This increase compares to a national increase of2% to $36,200.^^ In 1999, the region's
average wage increased 5.1 % in real terms, from $51,100 to $53,700. This compares to
a national increase of3.4% to $ 33,700.^®
Average wages for industry clusters increased 20%; wages in other industries increased
1%.^^
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Joint Venture's 2000 Index of Silicon Vall^
^ Everyone's Valley, Working Partnerships USA
Building Sustainable Gommnnities: Housing Solutions for Silicon VaUev,Prepared for the SiUcon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
®®Ibid.
Ibid.
Joint Venture 2000 Index of Silicon Valley
® Joint Venture 2001 Index of Silicon Valley
14
A representative household at the bottom 20% of Silicon Valley's income distribution has
less income now than in 1993. A representative household in the bottom 20% earns an
estimated $40,000. In the last two years(1998-99), households at the bottom 20% of
the income distribution saw their income increase slightly, but their 1999 income
remained below 1992 levels.'^
Incomes for the top earning 20% ofhouseholds rose an estimated 20% in inflation-
adjusted terms since 1993 to $149,000.^^
■
V
•
•
The econonty ofSilicon Valley resembles an hourglass with higher paying jobs offering
generous benefits growing at one end, whilelow-wage jobs providing few benefits grow
at a far more rapid rate at the other. The Califomia Employment Development
Department estimates that from 1997-2004,four ofthe ten fastest growing occupations in
Santa Clara County offer workers annual incomes ofless than $ 21,000.'^
Overcrowding
Almost one ofevery ten rental housing units in Santa Clara County is overcrowded. In
San Jose, at least 38,000 femilies are living in overcrowded conditions.
Population Growth
ABAC population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow dowm Overall,the Valley's population is
projected to increase by about 11 percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010,and 3.6 percent growth between 2010-2020. The cities
e}q)ected to e3q)erience the most dramatic popvilation incre^es between 2000 and 2020
are Morgan Hill(30 percent)and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda County.'^
Immigrants
Santa Clara Coimty is a majority minority county with more Asian or Latino immigrants
than any other Bay Area county. Approximately 49% are \diite, 25% Latino,23% Asian
and 3% black. Similarly the City ofSan Jose, the 11*** largest city in tihe United States, is
a majority minority city and has more Vietnamese than any city outside ofVietnam.
In the next two decades, Santa Clara County will gain more new residents(261,400)and
more new jobs(231,000)than any other Bay Area county. San Jose will gain 129,300
'"Ibid.
Joint Venture 2000 Index ofSilicon Vall^
Joint Venture 2000 Index ofSilicon Valley
^^Ibid.
Ibid.
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHuman Relations December 6,2000
15
new residents, reaching a population of 1,054,000. Over the next 40 years, it is predicted
Santa Clara County will grow by 47%,reaching over 2.5 million residents.^^
Except for a few higher-percentage areas like Npw York City and Miami, Santa Clara
County ranks at the very top ofareas within the United States that have a large
percentage ofimmigrants. One-third or 33% ofthe county's population is foreign-bom.'^
Santa Clara County is an immigrant demographic microcosm ofthe United States: five
ofthe top six sending countries to the United States are the top five sending countries to
Santa Clara County. These are Mexico,the Philippines, India, Vietnam, and People's
Republic of China. Similarly, these are the top five countries of origin ofimmigrant
public assistance recipients in Santa Clara County, with Mexico and Vietnam constituting
over 85% ofrecipients within the top five.'^
When we examine the types ofimmigrant jobs in Santa Clara County, the coimty also
reflects the Unites States immigrant occupational stmcture. In the areas of agriculture
work in south county, low-paid service jobs throughout the county, and high-tech
employment in north and west county, Santa Clara Coimty's immigrant job stmcture
represents a microcosm ofthe hourglass economy and a potent portent offanmigrant
employment trends nationally, given the low unemployment rate, the United States'
aging popidation, and the need for younger workers to uphold the social security system.
For example, in Silicon Valley technical workers firom India, China, and Taiwan
dominate the computer and Internet industries(where 36% of Asian immigrants are
employed in professional or managerialjobs, versus 24% for all immigrants and 30%for
the US-bom),and workers from Mexico dominate agricultural and janitorial positions.^''
About one in four ofhigh-tech firms in the Valley were founded by immigrants. In 1996
these firms employed 67,000 workers and generated annual revenues of$27.9 billion.
Since immigrants significantly make Silicon Valley's image ofthe "technobgical center
ofthe world" and produce a lot ofmaterial wealth, there are many articles calling
immigrants vital to the Valley.^'
Strategies for Solutions
In November 1999, the Silicon Valley Manufacturing Group and Greenbelt Alliance
joined forces to produce "Building Sustainable Communities: Housmg Solutions for
Silicon Valley". In that report they make the followmg recommendations:
1. Silicon Valley cities should systematically identify Underatilized sites that can be
redeveloped with new homes.
"Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
OflBce ofHuman Relations December 6,2000
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHmnan Relations December 6,2000
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHiiman Relations December 6,2000
16
2. Even relatively small increases in the number ofhomes that can be buUt per acre
will have a dramatic impact on the overall level of housing supply in Silicon
Valley.
3. Supplemental Action Items:
a. Cities should make an explicit commitment to good design and promote
design principles that result in developments that both fit into their
surroundings and support existing neighborhoods.
b. Cities should educate citizens about community issues as part ofa process
for making choices about the fiiture.
c. Many ofthe barriers to creating more housing can only be removed if
cities work together.
The Santa Clara County OflSce ofHuman Relations' Citizenship and Immigrant Services
Program conducted a summit on immigrant issues and published a report with these
findings and recommendations on housing, (pp.202-210)
Finding 1: There is an urgent and imniediate need for low income housing for ^
immigrants in Santa Clara County.
Recommendations:
1
^
■
Policy changes are needed in Santa Clara County so that rental rates in
existing housing do not exceed 30% ofthe total household income.
■ Coimtywide rent control is necessary and should take effect with no
regard to the year the building was erected.
■ It is important to build more quality affordable housing where the
rental rates are based upon household income and family size, like tax
credit housing.
■
The HUD prohibition ofaccess to Section 8 housing on non-qualified
■
immigrants should end.
More affordable housing should be built for more low-income people
making less than 50% of median income.
Finding 2: There is an immedkte need for emergency transitional housing for
immigrants in Santa Clara County. Emergency transitional housing as used here means
1,2, or 3 bedroom units that are made available for immigrants for a six to twelve month
period oftime until they become established in the count.
Recommendations:
■
■
Santa Clara County should help seek at least 100 affordable rented or
leased units ofrefiigees and immigrants and contract with reputable
resettlement agencies to help manage and run these transitional units.
This type ofhousing can provide one-stop transitional services for
recent arrivals, using existing service providers. These units could be
used as a training area for clients.
17
Finding 3: Lower income immigrant households are finding it extremely difficult to
purchase any housing due to lack ofcredit.
Recommendations:
■
Santa Clara Coimty should help facilitate an easy and affordable loan
process for immigrants so that immigrants can purchase their first
home.
■
The County should facilitate programs to lower the interest rate for
first time homebuyers.
City ofLos Angeles: Their Crisis and Strategies for Addressing It
The City ofLos Angeles is experiencing many ofthe same painfiil symptoms oTa
deepening affordable housing crisis as is found in Santa Clara County. Consider:
1. In 1999; the fair market rent for a two- bedroom apartment was $766. In order to
expend only 30% ofincome on this apartment an hourly wage of$14.73 is
required, more than twice the minimum wage and almost double the living wage
of$8.76 in Los Angeles.
2. Over the past ten years the highestjob growth has been in the low-wage earning
sectors ofservice, wholesale and retail. Projections indicate this will continue to
be the case.
3. The Section 8 waiting list opened up for the first time in ten years. About 153,000
families signed, 10% ofall households in the City and nearly three times as many
as holders ofall Section 8 certificates and vouchers.
4. Only 39% ofthe City's households own their own home in contrast to the national
average of66 percent.
5. Between June 30, 1998 and July 1, 1999,the City's population increased by
65,000 persons but only 1,940 net new units were built.
6. Residential construction is constraiued by a number offactors. Construction costs
are high. There is little vacant land left in the City and the land that is available is
hard to assemble into large enough parcels to make a development financially
feasible.
7. In 1990, nearly 30 percent ofthe total housing stock ofl.3 million units were
overcrowded.
8. In the last decade, 12,500 units ofhousing were demolished.
9. Every year the Los Angeles Housing department finances the construction or
rehabilitation of900 to 1000 affordable tinits, while 750 or more affordable older
units are demolished and 500 or more units with federal or local subsidies raise
their reiits to market rate.
10. More than 35,000 units ofaffordable housing are at-risk ofconverting to market
rate.
11. According to the Southern California Association ofNon-Profit Housing,Los
Angeles spends about $23 per person on affordable housing, none ofit from the
General Fimd. In contrast. New York spends $89 per person, nearly four times as
much as Los Angeles. Similarly, Chicago spends $76 per person, San Jose $71
per person and Seattle $66 per person. Between 1986 and 1996 New York Ciify
spent $4.2 billion in mostly city fluids to construct or rehabilitate more than
18
140,000 housing units, more than all oth^ major cities in the United States
combined.
In response to this overwhelming affordable housing crisis the City ofLos Angeles
convened a task force in November 1999 to come up with recommendations. Six
subcommittees were formed to examine fimding, state ofexisting affordable housing,
land use and planning, rental housing, basic research and economic development. Here is
an outline oftheir recommendations.
FUNDING(29-40)
'
1 Calculate Subsidy Gap Yearly and Recommend Ways to Close the Gap
2 Create a Housing Trust Fund funded by:
a. An inchisionary program for residential development
■ Adopt an inclusionary zoning ordinance
" Adopt an in-lieu fee as part ofthe inclusionary zoning
ordinance
■
a.
b.
c.
d.
e.
f.
Comply with the State's MeUo Act coastal housing
requirements
Adopt a linkage fee for commercial development
Redevelopment Agency's Business District Project Area tax revenues.
Citywide property growth
Increase and dedicate a portion ofthe transient occupancy tax
Levy fees on water usage above a first-tier base amount.
Secure stock options in exchange for Community Development Bank
Investments in e-commerce ventures.
g. Study additional fees on luxury items
•
Cable TV fi*anchise fee
h. Local general obligation bond for housing
i. Parking users tax
j. Increase the redevelopment housing set-aside(amend state law)
k. Dedicate to housing production at least 75 percent ofprogram income
generated by repayment ofearthquake and all other Los Angeles Hosuing
Department and Redevelopment housing loans.
3. Complete and Evaluate the Targeted Neighborhood Initiative Before Committing
New Funds
4. Improve the Condominium Conversion Fees Program
5. Dedicate future redevelopment revenues fi-om Bunker Hill project area to affordable
housing development.
6. Actively support a state general obligation bond for affordable rental housing.
7. Support a change in federal law to fecilitate using Home fimds for developments that
utilize low-income housing tax credits
8. Revise the state statute oflimitations for condominium construction defect litigation
9. Consolidate the housing fimctions ofthe Los Angeles Housing Department and the
Community Redevelopment Agency.
STATE OF EXISTING AFFORDABLE HOUSING(43-48)
19
1. Develop a Preservation Strategy for All At-Risk Affordable Housing
2. Ensure Enforcement ofthe Rent.Stabili2ation Ordinance in Pre-1979 Housing Where
the Owner has Prepaid the HUD Mortgage
3. Create the Position ofAffordable Housing Preservation Coordinator
LAND USE AND PLANNING(53-65)
1. Modify the City's Zoiung Code to Promote Affordable Housing
2. Expedite Processing for Housing Development
3. Improve Public Access to Planning, Zoning and Building and Safety Information
4.
Create Greater Affordable Incentives
5. Increase Home Ownership Opportunities by Permitting the Development of
Accessory Units
6. Ensure the Safety ofRenters by Creating Habitability Standards and a Legalization
Process for Illegal Units
7. Establish a New Entity to Provide Ongoing External Leadership to Address the
City's Housing Crisis
8. Educate the Public About the Need to Increase the Supply ofAffordable Housing for
all Income Groups
9. Integrate Affordable Housing in Major Projects Such as New Schools and Transit
Development
10. Encourage Sustainable Development and Green Building Practices
RENTAL HOUSING(71-80)
1. Improve the Quality ofPublic Itiformation at the Los Angeles Housing Department
(LAHD)and Make it Easier for the Public to Access
2.
Cross-Train LAHD staff
3. Develop a Citywide Relocation Policy and a Source ofFunding to Assist Tenants
Who Must Vacate Slum Properties
4. Preserve Existing Affordable Rental Housing Stock and Require Affordable
Replacement Housing Under Certain Circumstances
5. Review Systematic Housing Code Enforcement and Conq)laint Driven Programs
6. Increase Incentives for Owner Investment in Affordable Housing
7. Explore the Creation ofMandatory Certification Program for Resident managers
8. Incorporate the Creation and Preservation of Accessible Rental Housing for the
Disabled
9. Endorse Expansion ofthe State Low Income Tax Credit and Limit to Projects
Providing Affordability to Poorest Tenants
10. Aggressively Lobby the Federal government for Additional Fimding for Section 8
Subsidies
11. Create a City Attorney Position Designated to Work Full time with the LAHD to
Pursue Civil Remedies to Enforce the City's Rent Stabilization Ordinance and Other
Related Ordinances
BASIC RESEARCH(83-92)
1. Con^lete and Adopt the Citywide Housing Policy
2.
Create a Research Unit
20
3. Research Zonmg Barriers to the Development ofAffordable Housing
4. Evaluate Policy Altematives to Ensure Adoption ofEffective Policies and Programs
5. Evaluate LAHD Design Guidelines for Consumer Satisfection and Cost
Effectiveness
6. Notify Affordable Housing Developers When Publicly Owned Sites Are Made
Available for Purchase
7. Monitor Implementation ofCost Effective Environmental Programs for Healthy
Homes and Sustainable Building that could be Adopted in LA
8. Evaluate the Performance ofaU City Funded Programs
ECONOMIC DEVELOPMENT(95-97)
1. Help the Working Poor Increase Their Income
2. Educate the City's Workers
3. Launch a Citywide Information and Education Program
21
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING NEED;
SUPPLEMENTAL MATERIALS
REG I 0NAL TREND
INDICATORS
Rate of Job Growth Slows
WHY IS THIS IMPORTANT?
ABSOLUTE AND PERCENTAGE CHANGE IN THE NUMBER
Annual net job gains or losses are a basic measure of economic
health. This indicator is from a unique set of employment data
for the Silicon Valley region (see Appendix B for definition of
the region),
OF SILICON VALLEY JOBS FROM THE YEAR PRIOR
70.000
5.5%
5.2%(
60,000
/
HOW ARE WE DOING?
50,000
3.9%
Ill 2000, Silicon Valley experienced an estimated net increase of
39,200 jobs, a 3,0% annual growth rate.
4.3%
40.000
This rate represents slowed growth frorh the prior five years. At
peak employment growth in 1996 and 1997, Silicon Valley added
at least 60,000 jobs annually and grew faster than 5%,
30.000
20,000
0.9%
Since 1992, the first year of the regional employment dataset,
Silicon Valley has seen a net increase of more than 329,000 new
jobs. The total number ofjobs in the region is 1,35 million.
10,000
1993
1994
1995
1996
1997
1998
1999
2000*
Source: Employment Development Department
^Estimate
Software Adds the Most Jobs; Losses Reversed in Semiconductors and Bioscience
NET CHANGE IN CLUSTER EMPLOYMENT, .
SECOND QUARTER 1999 TO SECOND QUARTER 2000
WHY IS THIS IMPORTANT?
This indicator shows how employment in different clusters and
other industries changed in the most recent annual period.
35,000
30,000
25,000
HOW ARE WE DOING?.
20,000
15,000
10,000
5,000
. 0
1=1
(5,000)
Professional Innovation ■
SemiComputeiB/
Services
Services conductors/ Communi-
Software
Equipment
Bioscience
Defense/
Aerospace
cations
NET CHANGE IN EMPLOYMENT IN OTHER INDUSTRIES,
SECOND QUARTER 1999 TO SECOND QUARTER 2000
8,000-
6,000
For the third consecutive year, the Software cluster added the
largest number of new jobs — 30,700 — from the second quarter
of 1999 to the second quarter of 2000. This increase,was more
than double the 12,600 jobs added in 1998-99, The second-largest,
growth was in professional services with 9,900 new jobs, followed
by innovation services with 6,900,
Two clusters experienced job growth following declines in 1998-99,
The Semiconductors/Equipment cluster added 4,900 jobs, com
pared with losses of 13,400 in 1998-99. Bioscience gained 3,100
jobs, compared with a loss of 1,250 jobs in 1998-99, The Defense
and Aerospace,cluster showed a net job loss, losing 760 jobs.
Of the Qther Silicon Valley industries, Governrrient/Education
showed the largest gains, adding 6,400 jobs. Another growth sector
was Construction/Transportation/Public Utilities, adding 6,400 jobs.
Miscellaneous Manufacturing gained 3,000 jobs in 1999-2000,
after losing 5,700 jobs in 1998-99. Health Services and Finance/
Insurance/Real Estate lost 2,800 and 1,000 jobs, respectively,'
'
4,000
2,000
(2o000)•
(4.000) ■
Govy
Education
Construction/
Misc.
Transy
Mfg.
Public Utilities
Source: Employment Development.Department
Trade
Visitors Agriculture/ Finance/
Health
Industry Resource Insurance/ Services
Extraction Real Estate
LIVABLE ENVIRONMENT
Jobs Increase Four Times Faster than Housing
WHY IS THIS IMPORTANT?
RATE OF GROWTH IN JOBS AND HOUSING PRODUCTION
Building housing cominensurate with job growth helps mitigate
commute traffic, moderate housing price increases and ease
workforce shortages.
1.40
HOW ARE WE DOING?
1.30
Between 1992 and 2000, Silicon Valley was much better at creating
1.20
jobs than at creating housing. Silicon Valley produced 329,000 new
1.10
jobs but only 60,500 new housing units(1 home for every 5.5 jobs).
Within Silicon Valley, the overall ratio ofjobs to housing varies
widely by subregion. For example. North Santa Clara County has
1.00
the largest number ofjobs relative to housing (2:1). South Santa
1992
1993
1994
1995
1996
■■ JOBS
1W7
1998
1999
2000
Clara County has significandy fewer jobs relative to its housing (0:1).
In the most recent year(July 1999 to June 2000), Silicon Valley
produced an estimated 80,000 new jobs and 9,600 housing units.
Already job-rich North Santa Clara County gained 16 new jobs
for every one housing unit built. House-rich South Santa Clara
HOUSING
County gained three new jobs for each housing unit.
Recent growth in jobs exceeded housing construction in all other
RATIO OF NEW JOBS TO NEW HOUSING STARTS BY SUBREGION
subregions of the Valley as well: 6:1 in South San Mateo County;
5:1 in Central Santa Clara County; 10:1 in Southwest Alameda
County; and 8:1 in Scotts Valley.
To keep pace with job growth, the region would have had to build
160,000 additional housing units since 1992.
SOUTH
1
SANTA CLARA
COUNTY
1
OVERALL RATIO
■ NORTH SANTA CLARA COUNTY
I SCOTTS VALLEY
I CENTRAL SANTA CLARA COUNTY
I SOUTH SAN MATEO COUNTY
I SOUTHWEST ALAMEDA COUNTY
3SOUTH SANTA CLARA COUNTY
*
JULY 1999 - JUNE 2000
16:1
8:1
5:1
6:1
10:1
3:1
Sources: Construction Industry Research Boards Employment Development Department,
Department of Finance
»
REGIONAL TREND
INDICATORS
Silicon Valley Job Growth Cools
WHY IS THIS IMPORTANT?
ABSOLUTE AND PERCENTAGE CHANGE IN THE NUMBER
Annual net job gains or losses are a basic measure of economic
health. This indicator tracks employment from a unique set
of employment data tailored to cover the Silicon Valley region
(see Appendix B).
OF SILICON VALLEY JOBS FROM THE YEAR PRIOR
70,000
5.5%
60,000
\
HOW ARE WE DOING?
50,000
In 1999, Silicon Valley realized a net increase of an estimated
21,200 jobs, a 1.7% annual growth rate.
40.000
2.9%
This represents a slowing from 1998's 2.9% growth rate (36,600
jobs) and a significant departure from three years of ver\' rapid
employment growth from 1995 to 1997, In 1995, 1996 and 1997
Silicon Valley's net employment grew 5.5%,4.8% and 5.2%
respectively, adding at least 54,000 jobs each year.
30,000
2.1%
20.000
10,000
1993
1994
1995
1996
1997
1999*
1998
Source: Employment Development Department
'Estimate
Since 1992, the first year of the regional employment dataset,
Silicon Valley has seen a net increase of more than 275,000 new
jobs. The total number ofjobs in the region is 1.3 million.
This dataset does not inelude'self-employed people. Approxi
mately 15% of tax returns from the combined Santa Clara and
San Mateo County region report income from self-employment
Software Jobs Grow, Computers Constant, Semiconductors Decline
WHY IS THIS IMPORTANT?
NET CHANGE IN CLUSTER EMPLOYMENT,
SECOND QUARTER 1998 TO SECOND QUARTER 1999
This indicator shows how employment in different clusters
changed in the most recent annual period. A cluster is a concent
tration of complementary industries that generates wealth by
exporting from the region. The seven clusters tracked account
15.000 ■
10,000
5,000
for nearly 40% of all non-governmental employment in the region.
0
(5,000) ■
HOW ARE WE DOING?
(10,000) ■
Within the cluster industries, the biggest job gains remained in
(15,000) ■
software, which added 12,600 jobs between the second quarter
Software
Innovation Professional Computers/ Bioscience
Services
Services
Communi-
Defense/
SemiAerospace conductors/
cations
Equipment
NET CHANGE IN EMPLOYMENT IN OTHER INDUSTRIES,
SECOND QUARTER 1998 TO SECOND QUARTER 19.99
of 1998 and the second quarter of 1999. The second-largest
growth was in innovation services with 7,400, followed by profes
sional services with 3,100, The large computers/communica
tions cluster (114,000 total jobs) held relatively constant adding
170 jobs.
10.000
Three clusters showed net job losses. Bioscience lost 1,250 jobs,
8.000
6.000
defense/aerospace lost 5,300 jobs and serniconductors/semiconductor
4,000
equipment lost 13,400 jobs. In last year's Index, bioscience apd
1113
semiconductors/semiconductor equipment were among the top
four industry job gainers.
2,000
0
(2,000) •
(4,000) •
(6,000) ■
Construction/ Gov./
Visitots
Trans7
Industry
Education
Public Utilities
Agriculture/ Health
Resource
Extraction
Source: Employment Development Department
Services
Finance/
Insurance/
Real Estate
m
- Trade
Misc.
Mfg.
Of the other Silicon Valley industries, construction/transportation/
public utilities experienced the strongest growth, adding 9,200
jobs. Other strong performers were government/education (5,200)
and local and visitor services (4,650). Miscellaneous manufacturing
lost 5,700 jobs.
REGIONAL TREND
INDICATORS
Overall Shift From Quantitative to Qualitative Economic Growth
WHY IS THIS IMPORTANT?
ANNUAL GROWTH OF AVERAGE REAL WAGES AND JOBS
Silicon Valley 2010 called for a shift from evaluating the success of
IN SILICON VALLEY
the economy by quantitative growth—more jobs, more consump
tion of resources, more congestion—to qualitative growth—
enhanced productivity, better use of resources and jobs with
advancement potential open to more residents.
5% ■
I
■ ■■ ■I
■
■
I
■
■
This indicator Compares growth in average real wages to growth
in new jobs fOr each year from 1993 to 1999. Average real wages
is but one factor that defines job quality.
HOW ARE WE DOING?
I
In 1993-1994, the region added more than 40,000 jobs. Silicon
Valley's average wages,, however, stagnated during this period.
Although the region was gaining new jobs, it was also losing jobs
in well-paying sectors such semiconductors and defense.
1993
1994
1996
1995
^■.INCREASE IN WAGES
■
1997
1998
1999»
Through the robust growth period of 1995 to 1997, job growth was
paralleled by strong gains in the region's average real wage.
INCREASE IN JOBS
Although job growth slowed significantly in the past two years,
average real wage growth has remained strong:—4.8% in 1998
and 5.1% in 1999. This indicates qualitative economic growth
at a time when quantitative growth has slowed.
Source: Employmenl Development Department
*Estimate
^
Merchandise Exports Decline 11%; Region's Sha're of State Exports
Also Shrinks, But Software and Service Exports Are Not Counted
WHY IS THIS IMPORTANT?
SILICON VALLEY MANUFACTURING EXPORT SALES, AND SHARE
OF CALIFORNIA'S EXPORT SALES, 1998 DOLLARS
Exports generate wealth and jobs for a region and are an impor
tant indicator of global competitiveness. Serving growing global
demand for high-tech goods is key to employment and sales
growth for existing and new Silicon Valley firms.
36%
34%
HOW ARE WE DOING?
$30
In 1998, merchandise exports from Silicon Valley-based firms
declined 11% from $37.9 billion to $33.6 billion. Statewide, exports
decreased 7%. Nationally, exports declined 1%.
30%
29%
Silicon Valley companies accounted for 34% of California's nonagricultural export sales in 1998, a decrease from 36% in 1997.
$10
Part of this decline is attributable to softened demand for semi
conductors and semiconductor equipment in Asia. In addition,
much of the Valley's recent growth is being spurred by U.S.
1993
1994
.1995
1996
1997
1998
demand for Internet-related equipment and services.
Equally important, the decline reflects the fact that official govern
Source: U.S. Department of Commerce, Exporter Loeation Series
ment trade datasets do not include exports of services, including
most software. Joint Venture considers this a significant flaw that
will increasingly understate the Valley's global reach relative to
more manufacturing-intensive regions.
fifi)
Value Added per Employee Is High and Rising
WHY IS THIS IMPORTANT?
VALUE ADDED PER EMPLOYEE OVERALL
Value added is a proxy for productivity and reflects how much
economic value companies create.
S120.000
Increased valiie added is a prerequisite for increased wages. Inno
vation, process improvement and industry/produet mix drive value
added, which is derived by subtracting the costs of a company's
materials, inputs and contracted services from the revenue earned
from its products.
$100,000
$80,000
$60,000
$40,000
$20,000
HOW ARE WE DOING?
$0
1990
Overall value added per employee has inereased steadily sinee
1994 at an average annual rate of5%. Between 1998 and 1999
overall value added per employee increased 3% to $114,500.
Four clusters have value added per employee significantly above
the average. Computers/communieations had the highest value
added, at $289,000 per employee. Semiconductors/equipment
1994
1995
1996
1997
1998
1999
$300,000
$166,900, and innovation services had $139,000.
$150,000
Except for bioscience, value added by Silicon Valley clusters
is higher than the national average. This accounts for their
$100,000
national average.
1993
$250,000
$200,000
Of the other more local-serving industry seetors, wholesale trade
and finance/insurance/real estate had a higher value added per
employee than the regional average—$134,200 and $131,200
respectively. All sectors add more value than their respective
1992
VALUE ADDED PER EMPLOYEE BY CLUSTER, 1999
had the second-highest value added, at $240,800. Software had
exceptionally high wages.
1991
$50,000
$0
Computers/
Semi• Software
Communi- Conductors/
cation
Equipment
Innovation
Services
Defense/
Aerospace
SANTA CLARA COUNTY
■■
Bioscience Professional
Services
U.S.
VALUE ADDED PER EMPLOYEE BY OTHER INDUSTRY GROUPINGS, 1999
$140,000
3120,000
3100,000
380,000
360,000
340,000
320,000
Trade
Construction/
Local
Trans./
and Visitor
Public Utilities Services
■■ SANTA CLARA COUNTY
Sources: Regional Financial Associates, Collaborative Economics
1
Health
Government/
Services
Education
One New Home for Every 19 New Jobs in South San Mateo Region
WHY IS THIS IMPORTANT?
Building housing commensurate with job growth helps mitigate
RATIO OF NEW JOBS TO NEW HOUSING STARTS
BY SUB-REGION (JUNE'1998-JUNE 1999)
commute traffic, moderate housing price increases and ease
workforce shortages.
HOW ARE WE DOING?
In 1999, an estimated 7,831 housing units were built in Silicon
Valley. This number is lower than the 11,105 units built in 1998.
Multi-family housing was 49% of total starts.
In 1999, the ratio of new jobs to new housing was approximately
3 to 1, because of a slowing in job growth. Since 1992, the Silicon
Valley region has added more than 275,000 jobs and created 54,600
housing units (5 jobs for every 1 housing unit.)
m
m
Part of what causes commute traffic is the structural imbalance
in the creation ofjobs and housing within Silicon Valley's six
major subregions. Between June 1998 and June 1999, for exainple,
the southern San Mateo County region produced 19 jobs for
every one housing unit. Southwest Alameda County and South
Santa Clara County produced four jobs and three jobs for
every one housing unit. North and Central Santa Clara County
generated two jobs for every one housing unit.
A£
■■SOUTH SAN MATEO COUNTY 19:1
■■ SOUTHWEST ALAMEDA COUNTY 4:1
■■SOUTH SANTA CLARA COUNTY 3:1
ESS NORTH SANTA CLARA COUNTY 2:1
CENTRAL SANTA CLARA COUNTY 2:1
Cn^SCOTTS VALLEY 0:1
^
Sources: Construction Industry Research Board, Employment,Development Department
n-RMLTSia: 9 I 1.1 b U N VAL.LtT AND THE BAT AREA
U-
20% OF SANTA CLARA COUNTY'S WORKFORCE LIVES OUTSIDE THE COUNTY,
UP FROM 16% IN 1990
The number of workers commuting into Santa Clara County from surrounding counties increased from
144,000 in 1990 to 212,000 in 2000 — a 47% increase. The commuters'share of total employment in
Santa Clara County increased from 16% in 1990 to 20% in 2000.
Though the absolute number of commuters increased markedly, the shifts in the home counties of
the commuters were only slight. The largest shareiof commuters,48%,live east of Silicon Valley —
the same as in 1990. The share of commuters from the Peninsula and points north declined from 36%
to 32% between 1990 and 2000. The share of commuters from the west increased from 12% to 15%.
The share from San Benito and Monterey Counties increased from 4% to 5%.
'
ORIGIN AND Number of commuters into santa clara county
Source: Melropolitan Transportation Commission; Center for Urban Analysis
IMPLICATION
While Tri-Valley, Santa Cruz County and San Francisco have developed significant concentrations of
technology jobs, the greatest concentration of such jobs still remains in Silicon Valley.
Because 80% of the workforce lives in Santa Clara County, education and training of our residents
remain key to future success.
©
More Students Completing Courses for College Entrance
WHY IS THIS IMPORTANT?
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE REQUIREMENTS
Passing a breadth of core courses required for college entry is a
measure of achievement, capacity and readiness. Completing some
type of education beyond high school is increasingly important for participating in the high-wage sectors of the Silicon Valley
economy. A Joint Venture survey of the region's fastest-growing
companies found that 84% of positions require education or
llllll
20%
training beyond high school.
10%
HOW ARE WE DOING?
The share of high school students who complete the courses
required for entrance to the University of California(UC)or
California State University(CSU)systems increased from 43%
in 1997 to 47% in 1998. Silicon Valley compares very favorably
1992-93
1993-94'
1994-95
1995-96
I SANTA CLARA COUNTY
1996-97
1997-98
I CALIFORNIA
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE
REQUIREMENTS, BY ETHNICITY, 1997-98
with the state average of 33%.
70%
The number of students completing the requirements in Silicon
Valley has steadily increased since 1994 when only 36% ofstudents
met the standard.
30%
Performance, however, varies widely by ethnicity Only 23% of
Hispanic and 22% of African-American students completed these
20%
10%
courses in 1998, compared with 66% of Asian students and 47%
0%
of white students. .
Asian
White
Filipino
—
Native
Pacific
American
Islander
I I
Hispanic
African
American
— AVERAGE 47%
Source: California Department of Education
mi
INCLUSIVE SOCIETY
goal 11: TRANSPORTATION CHOICES We overcome transportation barriers to ernployment and increase mobility by investing
in an integrated, accessible regional transportation system and other alternatives to driving alone.
Transit Ridership Per Capita Shows No Change
WHY IS THIS IMPORTANT?
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA AND SAN MATEO COUNTIES, PER CAPITA
People want more choice in how they get to work, to school or
to mn errands. A greater percentage of workers using alternatives
to driving alone indicates progress in increasing access to jobs
and ih improving the livability of our communities. Pedestrian-
and transit-oriented development in neighborhoods and employment-and shopping centers increases opportunities for walking,
bicycling and using transit.
HOW ARE WE DOING?
Per capita ridership on public transportation did not change in
1999, remaining at 33.5 annual rides per person. Total ridership
1990
1991
1992
1993
1994
1995
1996
1997
1998
SHARE OF SILICON VALLEY COMMUTERS USING
increased 2%,from 80.5 million'in 1998 to more than 81 million
VARIOUS COMMUTE MODES, 1999
in 1999, but population increased at a similar rate.
Ridership increased on light rail, Caltrain and VTA buses, but
has decreased on SamTrans buses by 11% since 1994.
■ Drive Alone 79%
■ Shared Ride 15%
A 1999 survey of Valley commuters found that 79% drove to work
■ Transit 4%
alone, 15% shared a ride, 4% used transit and 1.5% walked or
13 Walk/Bike 1.5%
hiked to work. The share ofcommuters using transit has increased
from 2.8% in 1990. Carpooling^also increased from 12.4% in
1990, facilitated by a nearly complete system of high occupancy
■ Other .5%
vehicle(HOV)lanes.
25
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,,
RIDES for Bay Area Commuters
Estimate
1999*
Silicon Valley Wages.Increase 9% Over 1999
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, 2000 DOLLARS
Growth of the average annual wage in inflation-adjusted terms is
an indicator ofjob quality..It is as important a measure of Silicon
Valley's economic vitality as job growth.
$70,000
HOW ARE WE DOING?
$60,000
The estimated average wage in Silicon Valley grew 9.2% in the
year 2000, after accounting for inflation. The average wage
$50,000
increased $5,600, from $60,800 in 1999 to $66,400 in 2000.
Nationally, the increase was 2%.
$40,000
$30,000
Silicon Valley's average wage is 84% above the nation's average
wage of$36,100. The Valley's high productivity allows wages to
increase faster than the rate of inflation; tight labor markets and
$20,000
$10,000
high housing costs accelerate wage increases.
1992
.1993
1994
1995
1996
■■i SILICON VALLEY
1997
1998
1999
2000'
mm U.S.
Sources: Employment Development Department, Bureau of Labor Statistics, Economy.com
*Estimate
Cluster Wages Grow 20% Overall; Average Software Wage Reaches $125,000
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, CLUSTER INDUSTRIES, 1999
Average annual wage increases in driving cluster industries are
an indicator of the wealth-generating impact that outward-oriented
industries have on Silicon Valley. Healthy cluster industries stim
ulate local-serving mdustries, as companies and the people
they employ spend money on goods and services offered within
$140,000
$120,000
$100,000
. $80,000
the region. '
$60,000
$40,000
HOW ARE WE DOING?
$20,000
Software continues to have the highest average annual wages,
reaching $124,700 in 1999, an increase of 25% from the prior year.
$0
Software
The second-highest average wages are found in the Semiconductors/.
Equipment cluster at $117,000, followed by Computers/Commu
nications at $110,100. Wages in the Semiconductors/Equipment
cluster experienced the largest absolute change of $27,000; the
Semiconductors/
Equipment
Computers/
Communications
Bioscience
Innovation
Services
Defense/
Aerospace
Professional
Services
AVERAGE PER EMPLOYEE WAGE, OTHER INDUSTRIES, 1999
Computers/Communication cluster showed the largest percent
S70.000
increase from the previous year, 32%.
S60,000
Overall, average wages in cluster industries increased 20%; wages
850,000
840,000
in other industries increased 1%.
830.000
Among the other industries in Silicon Valley, Finance/Insurance/
Real Estate remains the highest at $60,400. The largest-employing
sector, Government/Education, has the third-lowest wages per
$20,000
$10,000
employee at $39,300.
Finance/
Insurance/
Real Estate
Trade
Misc.
Mfg.
Construction/ Health
TransV
Services
Public Utilities
Source: Employment Development Department
©
GovJ
'Education
Visitors Agriculture/
Industry Resource
Extraction
Value Added per Employee.Is Double National Average
WHY IS THIS IMPORTANT?
VALUE ADDED PER EMPLOYEE OVERALL
Value added is a proxy for productivity and reflects how much
economic value companies create.
$140,000
Increased value added is a prerequisite for increased wages.
Innovation, process improvement and industry/product mix
drive value added, which is.derived by subtracting the costs of
$120,000
a company's materials, inputs and contracted services from the
revenue earned from its products.
$60,000
$100,000
$80,000
$40,000
$20,000
HOW ARE WE DOING?
$0
1990
Since 1994, Silicon Valley has experienced rapid increases in
value added per employee, averaging 8.7% annually. Between
1999 and 2000, overall value added per employee increased 7%
to $127,100. The national average is $60,800.
Four clusters have value added per employee significantly above
the regional average. Computers/Communications had the highest
value added at $274,400 per employee. Semiconductors/Equipment
1991
1992
1993
1994
1995
SILICON VALLEY
1996
1998
1999
2000
H
VALUE ADDED PER EMPLOYEE BY CLUSTER, 2000
$300,000
$250,000
$200,000
had the second-highest value added at $254,600. Software had
$192,600, and Innovation Services had $180,200.
/
Value added by Silicon Valley clusters is higher than that of
their national counterparts. This accounts for their exceptionally
high wages.
$150,000
$100,000
$50,000
Computers/
Semi-
Communi-
conductors/
cation
Equipment
Software
Innovation Bioscience
Services
I SANTA CLARA COUNTY
Source: Economv.com
Defense/
Professional
Aerospace
Services
U.S.
INNOVATIVE
ECONOMY
GOAL 3: broadened prosperity Our economic growth results in a higher standard of living for lower-income people.
, Economic Success Is Not Raising Income for All
HOUSEHOLD INCOMES OF SANTA CLARA COUNTY RESIDENTS,
ADJUSTED TO REPRESENT A HOUSEHOLD OF FOUR, 1999 DOLLARS
$160,000 ■
S140.000 ■
WHY IS THIS IMPORTANT?
This progress measure looks at change in household income at
the top 20% and bottom 20% of the'income distribution. House
hold income includes income from wages, investments. Social
Security and welfare payments for all people in the household.
The indicator compares the income available to a representative
$120,000 ■
four-person household at identical points in the distribution over
different periods of time.
$100,000 -
$80,000 ■
HOW ARE WE DOING?
$60,000 -
Inflation-adjusted incpmes of representative,households at ±e
$40,000 ■
lowest 20th percentile of the income distribution have been rising
only since 1997. However, the 1999 income level, an estimated
$20,000 -
$40,000, is below the income level earned by the bottom 20% of
households earlier in the 1990s.
SO1993
1994
1995
1996
1997
1998
1999
■■ 20TH PERCENTILE
Ml 80TH PERCENTILE
Source: Census Bureau
INNOVATIVE
Nationally, household incomes at the 20th percentile rose :
between 1993 and 1999. In Santa Clara County, these incomes
declined an estimated 7% in inflation-adjusted terms. Inflationadjusted income of households at the 80th percentile increased
20% to an estimated $149,O0O in Silicon Valley.
ECONOMY
GOAL 4: economic opportunity All people, especially the disadvantaged, have access to training and jobs with advancement potenti;
High School Graduation Rate.Declines
WHY IS THIS important?
HIGH SCHOOL GRADUATION RATE, SILICON VALLEY
Accessing quality jobs requires not only graduating high school,
but also additional education or training. The high school gradua
tion rate is a risk indicator that warns of lost potential and future
societal costs resulting from people being un- or underemployed.
7095,
A multicultural, highly skilled workforce has unique advantages
for a globally competitive region. Providing a quality education
for all ethnic groups should be a prime objective in Silicon Valley.
5095,
5095,
4095,
HOW ARE WE DOING?
1993
1994
1995
1996
1997
1998
1999
2000
In 2000, 70.3% of the students who enrolled as freshmen in
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY, 1999, SILICON VALLEY
100%
^
80% H
public high schools in 1996 graduated as seniors. This is a decline
from the 1999 rate of 75.3%. The Silicon Valley graduation rate
was approximately two percentage points higher than the state
wide average in 1999.
11
Graduation rates vary widely by ethnicity. Asian students achieved
the highest graduation rate at 97%(1999 data). Eighty-two percent
of Filipino students and 78% of White students graduated. The
graduation rate among Hispanic studerits remained unchanged
from 1998 levels at 57%. .
Asian
Filipino
White
Pacific
Nativt
Native
African
Islander
American
American
Source: Alameda, Santa Clara, San'Mateo County Offices of Education
Hispanic
Average Wage Increased 5% in 1999
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, 1999 DOLLARS
Growth of the average annual wage in inflation-adjusted terms is
an indicator ofjob quality. It is as important a measure of Silicon
Valley's economic vitality as job growth.
$60,000 ■
HOW ARE WE DOING?
$50,000 •
In 1999 the average wage in Silicon Valley grew 5.1% after
accounting for inflation, from $51,100 to $53,700. Nationally the
$40,000 ■
increase was 3.4%.
Silicon Valley's average wage is more than 59% above the
$30,000 •
nation's ($33,700).
$20,000 ■
The Valley's high productivity allows wages to increase above the
rate of inflation.
$10,000 •
$0 ■
1992
1993 .
1994
1995
1996
imm SILICON VALLEY
1997
1998
1999»
■■ U.S.
Sources: Employment Development Department, Bureau of Labor Statistics, Regional Financial Associates
*Estimate
Average Wage for Soffware Cluster Exceeds $95,000;
Largest-Employing Sector—Local and-Visitor Services—-Remains Below $23,000
WHY IS THIS IMPORTANT?
Average annual wage increases in driving cluster industries are
an indicator of the wealth-generating impact that outward-oriented
industries have on Silicon Valley. Healthy cluster industries can
AVERAGE PER EMPLOYEE WAGE, CLUSTER INDUSTRIES, 1998
$100,000
stimulate local-serving industries, as companies and the people
$80,000
they employ spend money on goods and services offered within
the region.
$60,000
$40,000
HOW ARE WE DOING?
$20,000
Of the cluster industries, software continues to have the highest
average annual wages, reaching $95,800 in 1998. The second
Software
highest cluster is semiconductors/equipment at $86,300, followed
SemiComputers/ Innovation Bioscience
conductors/ Communi- Services
Equipment
cations
Defense/ Professional
Aerospace Services
by computer/communications at $80,200 and innovation services
at $72,300. For the second year in a row, computer/communications
demonstrated the largest absolute ($7,160) and relative (9.8%)
increase from the previous year.
Among the other industries in Silicon Valley, finance/insurance/
real estate remains the highest at $54,000, The largest employing
sector, local and visitor services, has an average annual wage
AVERAGE PER EMPLOYEE WAGE, OTHER INDUSTRIES, 1998
$60,000
$50,000
$40,000
$30,000
of $22,900,
$20,000
$10,000
Finance/
Insurance/
Real Estate
Trade
Misc. Construction/ Gov./
Health
Mfg.
Trans./ Education Services
Public Utilities
Source: Employment Development Department
Local and Agriculture/
Visitor
Resource
Services
Extraction
special Analysis: Silicon Valley's Digital Divide
By tracking a broad base of indicators that spans the economy, society and environment, the Index
identifies emerging issues facing the region. The 2000 Index reveals a growing Digital Divide in
Silicon Valley.
WHAT IS THE DIGITAL biVIDE?
^
!
.
..
^ .
The Digital Divide is about more than connecting to the Internet; it is about connecting to opportunity
in the new digital economy. Silicon Valley's Digital Divide is the gap between different communities
in workforce, education, the economy and technology.
WORKFORCE GAP: Our current supply of skilled labor does not meet the needs of the high-technology
companies that fuel our region's economy. Joint Venture's Workforce Study, which vvas released in the
spring of 1999, identified a workforce gap of 31 to 37% of the high-tech industry demand for workers
in Silicon Valley. The cost of this workforce gap to high-tech industry is'approximately $3-4 billion in
incremental hiring and opportunity costs.
WORKFORCE DEMAND OF HIGH-TECH INDUSTRY CLUSTERS
Positions Filled By:
Workforce
Gap
B Local Labor Force 63-69%
■ Commuters I6-18%
■ Outside Recruits 10-12%
B Unfilled Positions 5-7%
Sources: A.T. Kearney Workforce Initiative Survey, Santa'Clara Valley Transportation Authority,
Association of Bay Area Governments, Employment Development Department
EDUCATION GAP: On every measure of educational attainment in this year's Index, wide variation
exists by ethnicity. This is a particularly critical challenge for Silicon Valley, because low education
attainment afflicts our fastest-growing population, Hispanics, most extensively.
• Fifty-seven percent of Hispanic students graduate high school, compared with 86% of white stu
dents and 97% of Asian students.
• On average, 29% of ninth- and tenth-grade students were enrolled in Intermediate Algebra in
1999, up from 26% in 1998. Only 19% of Hispanics were enrolled.
• On average,47% of high-school students completed the course requirements for UC/CSU
entrance in 1998. Only 23% of Hispanic students met this requirement.
• Hispanics earn only 6% of engineering degrees awarded by local universities.
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY,
SILICON VALLEY, 1998
/•
1
80%
1
AfVii,
1
rniiM
Asian
Filipino
African
While
Islander
American
Sources: Alameda, Santa Clara and San Mateo County Offices of Education
©
American
Hispanic
arnClHL ARALTSIS: SILICON VALLET'» DIGITAL DIVIDE
ECONOMIC GAP: In addition to gaps in our supply of skilled labor and educational preparation, the
region faces wide income disparity among different groups. There lias been a widening income gap
during the ,1990s in Silicon Valley. While incomes of the lowest 20% of households have increased
slightly the last two years, those incomes are still below 1992 levels (see page 18).
TECHNOLOGY GAP; Access to technology varies by race and income.
In the San Francisco Bay Area, 46% of people with household incomes less than $40,000 access
the Internet compared to 81% with household,incomes more than $80,000(Bay Area Council, 1999).
T^hirty-seven percent of Hispanics in the Bay Area use a computer on a frequent basis compared
to 59% of non-Hispanic Whites (Public Policy Institute of California, 1999).
BOTH THE NEW ECONOMY AND CHANGING DEMOGRAPHICS AFFECT THE DIGITAL DIVIDE
These gaps widen as the New Economy creates new skills demands at the same time that the demo
graphics of the Valley continue to change.- As our population becomes more'diverse, special efforts
are required to ensure,that the Digital Divide does not continue to widen.
As we enter the year 2000, we cross an important demographic milestone: no racial/ethnic group is
a statistical majority. Anglos represent 49% of the combined population of Santa Clara and San Mateo
counties and only 39% of the school-aged population. Population projections point to increased diver
sity of our region as we advance toward 2010.
WE HAVE CROSSED A DEMOGRAPHIC MILESTONE
50% ■
40% •
30% ■
20% ■
10% •
1995
1996
1997
1998
1999 2000* 2001* 2002* 20O3* 2004* 2005*
WHITE %
mm NON-WHITE %
1999 SCHOOL-AGED DEMOGRAPHICS REFLECT THE NEW SILICON VALLEY
■ White 39%
■ Hispanic 31%
■ Asian and Pacific Islander 26%
□ African American 4%
,■ Native American 0.2%
Source: Department of Finance
•Projection
IMPLICATIONS FOR SILICON VALLEY
Joint Venture believes that Silicon Valley's continued economic and social vitality is dependent on
our ability to prepare more people in the region for the demands of the new workforce, whether in
high, tech or other fields. This is the challenge that will be the focus of Joint Venture's work as we
explore ways to enable all people in Silicon Valley to succeed in the new Digital Economy.
©
P
TABLE 1: Jobs Paying Less than 530,000 per year in Santa Clara County, 1999
i
Job Oeseriptlon
Mean Annual Wage
No.of People Working
s' Jobs paving less than $15,000 per vear
$
Fast Food Cooks
Dishwashers
SI Waiters and Waitresses
ally everyone else. With monthly rental costs
f."
$13,830
$14:640
$14,700
$14,750
Dining Room, Cafeteria Attendants
failed to meet even the minimal needs of virtu
1
Total
4,510
5,720
5,620
9,530
25,380
now averaging $1,900,the bidding wars that well
fe
;
paid workers wage for the limited supply of
housing continues to have a devastating infla
tionary impact on the entire Silicon Valley hous
--
:
Jobs paying $15,001 to $20,000 per year
Restaurant Host and Hostesses
$15,590
$15,650
Counter Attendants (cafeteria, coffee shop, concession) $15,870
Bartenders
$16,460
Food Preparation Workers
$17,240
Maids and Housekeeping Cleaners
$17,820
Child Care Workers
/
$18,010
Cashiers
$18,500
Janitors and Cleaners(except housekeeping)
$18,600
Hand Packers and Packagers
$18,760
Restaurant Cooks
$18,880
Hand Laborers and Freight, Stock and Material Movers $19,620
Teacher Assistants
$19,730
Teacher Assistants
$19,730
Counter and Rental Clerks
$19,750
Retail Salespersons
$20,290
Helpers-Production Workers
$20,990
1 Combined Food Preparation & Serving Workers
i
i
4
-
i
i
1
8
i
5-4
k
i
Total
2,990
22,170
5,190
2,230
4,500
4,750
1,790
19,420
20,310
7,340
4,670
20,070
6,930
6,930
2,250
22,790
2,960
157,290
^ .
ing market.
The evolution ofthe hourglass shaped economy
isn't limited to Silicon Valley. The explosive
t
growth ofhigh-tech and information technology
'
1
& industries has spawned similar polarization in
other communities nationwide. The New
I'l Economy does generate enormous wealth.How
ever, absent widespread collective bargaining
and other mediating institutions, new wealth is
"S,
concentrated in core industries and critical oc
cupations,potentially widening existing inequi
i
Jobs paying 20,001 to $25,000 per year
Security Guards
Preschool Teachers
Nursing Aides, Orderlies arid Attendants
-
i Tellers
1
1
S
Landscaping and Groundskeeping Workers
Stock Clerks and Order Fillers
Receptionists and information Clerks
tri
$20,210
$21,350
$21,600
$22,070
$24,210
$24,290
$24,340
Total
i
13,040
2,270
4,380
4,190
6,820
9,070
7,600
47,370
t Child, Family and Social Workers
1 Data Entry Keyers
Shipping and Receiving Clerks
'
1 Team Assemblers
i General Office Clerks
•
V
m
Electrical & Electronic Equipment Assemblers
Billing and Posting Clerks
inspectors. Testers, Sorters, Samplers & Weighers
Light Truck Drivers, Delivery Services
School Bus Drivers
Industrial Truck and Tractor Operators
i Phamnacy Technicians
i Bill and Account Collectors
Bus drivers, transit and intercity
Total
Table 1 illustrates the number of workers in our
region holding low-wage jobs and facing over
P whelming housing costs. How many of these
311,000 workers and their families will require
M
i Jobs paying $25,001 to $30,000 per year
1
ties.
:
:,
$25,050
$25,170
$25,100
$25,290
$25,300
$26,140
$26,590
$26,700
$27,080
$27(640
$27,970
$28,920
$29,180
$29,650
1,000
2,640 ■
8,250
11,200
15,820
18,790
5,370
7,770
5,190
3,760
2,320
affordable housing? Ifwe assume that there are
T
1.5 income eamers for afamily offour,then 20%
,
would qualify for ELI, 79% would qualify for
9 VLI, and 1% for LI. Even assuming there are
fe two low wage incomes per household, 64% of
fe"
H
the income eamers listed in the table would
u
qualify for VLI and 36% would qualify for LI*.
However, many of these households would not
fe
have two full-time income eamers with two chil
820
2,620
1,780
87,330
f
dren,given the difiSculties and cost ofarranging
Number of Jobs listed paying less than $30,000*
ii Total Number of Jobs paying less than $30,000
1 Total Number of Jobs in Santa Clara County
% of total paying less than $30,000
1
317,370
365,480
936,300
39.03%
;.
fiiU-time childcare®.
* In our estimations, each income earner provides haif of the total
••
'This figure is smaller than the courify total ofjobs paying less than $30,000 as it excludesjobs with 2000 or fewer workers.
Total jobs paying less than $30,000 are included In the total.
g
WORKING PARTNERSHIPS USA:
Policy Briefs:Silicon Valley Equity Series
s
Silicon Vallev^s
Housing Crisis
household income. In the first calculation, with 1.5 eamers, each
earner makes 75% of a low-wage salary. In the second calculation,
each salary provides half of the household Income, and each
household earner makes 100% of a low wage salary.
Source:BLS,OES Data 1999
0
With demand rapidly escalating, restrictions on and industrial development, generate the bulk
supply have also exerted enormous inflationary ofthe revenue that fills city coffers. A1999 sur
"By allowing
fiscal policy to
pressure on housing markets. Prohibitions on vey by the Public Policy Institute of California
drive land use
developing land that would otherwise be suit substantiated the effect ofthis logic, noting that
able for housing, such as San Jose's Urban the state's city managers placed far more value
Growth Boundary, may serve legitimate envi on generating new sales tax revenue thari filling
choices,city
officials make
decisions that
ronmental objectives. However,by luniting land the need for affordable housing.**
availability, they also contribute to the rise of
•By allowing fiscal policy to drive land use
choices, city officials make decisions that ap
Neighborhood opposition to new housing devel pear financially prudent, but cause lasting dam
opment is another key factor in Silicon Valley's age to the community. Some state leaders now
housing shortage.Though empirical evidence to recognize the dangers of"fiscalizing" land use,
support their worries fails to exist, homeowner but have had difficulty overcoming resistance
appear
housing pri^sl*--^
concern that the introduction ofaffordable hous
financially
prudent, but
cause lasting
damage to the
community."
by local officials to change.
ing in their neighborhoods will dirhinish prop
erty values has bolstered opposition to needed
development. This "not in my backyard"senti
ment has been a major obstacle to the expan
sion ofaffordable housing in San Jose.
1
TABLE 2: Ratio of jobs to housing
Palo Alto
Additionally, California's public finance system
works to discourage new housing development
by denying cities the tax revenues necessary to
pay for the basic services new residents require.
For example,the total amoimt ofproperty taxes
61,505
Population (i)
Number ofjobs, 2000 (2) 106,690
Housing units (3)
26,097
Santa Clara Sunnyvale San Jose
102,895
135,370
39,326
Jobs to housing ratio 4.1
3.4
1 California Department of Finance projections; January, 2001.
133,215
131,140
54,437
923,591
410,990
-287,506
2.4
2Associatibn of Bay Area Governments(ABAG)job projections.
3 California Department of Finance projections; January, 2001.
IK'i
received by the City of San Jose for FY 99-00
totaled $66,684,000. These revenues constituted
less than halfofthe police department's operat
ing budget alone $175,092,408! Given these
limitations,it's little surprise that municipalities
often regard new housing less as an asset than ** Despite the fiscal disincentives for housing cpnstruction, it is
important to note that different cities in the region vary significantly in
as a source of new expense. On the other hand, the extent to which they allow these pressures to limit their commit
sales taxes, which are generated through retail
ment to the production of affordable housing.As Table 2demonstrates,
San Jose stands out as the city with.the greatest sense of regional
responsibility towards responding to the valley's housing needs. Not
* The UGB encourages "smart-growth" strategies to address the jobshousing imbalance and related stress on our infrastructure. One such
strategy,is to build housing along transit corridors.
only Is San Jose's jobs/housing ratio much lower than those of other
cities, it also produces a higher percentage of subsidized units. Thus,
San Jose does less to cause housing price inflation and does more to
mitigate the effects of high housing costs than its neighboririg cities.
Silicon Valley^s
Housing Crisis
WORKING PARTNERSHIPS USA 1
(
1.4
|f;
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING BROADLY DEFINED
prepared by:
Susan Silveira
Springboard Consulting
HOUSING: BROADLY DEFINED
The State Picture
Three Factors are at the Heart of California's Housing Crisis
1. Housing Production has Plummeted in the 1990s
During the 1990s, California added approximately halfthe number of housing units built
in each ofthe two previous decades. Not only has housing production dropped, it has
foiled to keep pace with population and job growth. Between 1994 and 1998, California's
population increased by 4.4 percent, while the supply of housing rose by just 1.6 percent.
Production trends over the past three decades show a dramatic drop in housing
construction during the 1990s. The state's Department ofHousing and Community
Development estimates that California needs to add 1.26 million units, consisting of
703,285 units ofowner occupied housing and 561,180 units ofrental housing, between
1997 and 2003 in order to meet projected demand.'
SifiMWcant Cflp RetwMn Projected Need tor Housing
end ActH^ Pioduction
MUIl
.. ..
...
Mcua
aijaaa.
•>tMr
B«,«>
In contrast,just 376,896 units ofhousing were built in the state during the past three
years. At current production levels, state oflBcials estimate that California is experiencing
a production deficit ofapproximately 100,000 units per year.^
Greatest Production Shortfall is for Multifamily Housing
Muhifomily housing accounts for the majority ofthe state's production gap, particularly
housing that is affordable to lower income families. Not only did production decline
during the 1990s, but also the balance between single and multifamily housing
production shifted significantly toward single-femily housing. During the 1980s, for
example, California added an average of91,682 units of multifomiiy housing per year, 45
^ Locked Out: California's Affwdable Housing Crisis. California Budget Project May 2000
^ Lodced Out: California's AffOTdable Housing Crisis. California Budget Project May 2000
percent ofthe new housing built. Between 1990 and 1999, the state added an average of
28,089 units per year of multifamily housing,just 25 percent oftotal housing built during
the decade and a 69 percent drop from the levels ofthe 1980s.^
MultffamUy
a PRuch SmnRer Share ef Pierluctien Durlni
the 1990c
--
^ titma
I
■b
u
■.XK4±
KV.JX
The failure of the supply of rental housing to keep pace with population growth has
caused vacancy rates to drop and rents to rise. The imbalance between supply and
demand has pushed rents higher, imposing a significant burden on low and middleincome renters. Rental unit vacancy rates in most of the state's major metropolitan areas
are fer below the national average. *
McstCcilffomla
Area* Have
L«wm Rcnld Vacancy Ratcc than lh« US
CIS
I
i
I'.'':e<
t)-«
^fl-- 4
f"
/ / ./
/y
' Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
* Locked Out: California's AfFrwdable Housing Crisis. Califcsnia Budget Project May 2000
2. The Lack of Supply is Exacerbated by a Geographic Mismatch
Between Jobs and Housing
T^ibfe 5: Job Giofvtli Ewoedo
Housmg(tMwrh m Al otthe
Sl««'«L.«««CoWlliOK 199} 09
Job growth has exceeded housing growth in nearly every part ofthe state
since the economic recovery began in earnest in 1994. The number ofnew
jobs exceeded the number ofnew housing units in all but 12, primarily
Ratio of
Joboto New
Cowtiv
HousMoiMis
Sari Frai*!©.!)
15.310 1
rural, California counties between 1994 and 1998. The state as a whole
added 3.9 jobs for each new unit of housing, more than twice the 1.5-to-l
ratio recommended by housing policy experts. The ratio ofnew jobs to
new housing exceeded 5-to-l in Los Angeles, Santa Clara, San Mateo, San
Francisco, and Inyo coimties. The housing deficit is most severe in the Bay
Area, which has led the state in economic growth. Within the nine-county
Bay Area, for example, suburban Solano County is the only county where
the ratio ofjob growth to housing growth was less than 1.5-to-l between
1994 to 1998.^
3. The Fiscalization of Land Use
I0.3-to-1
L^a.^ngeies
9,4t(H
Sa'ta Ciara
8.310-1
5.fl-lo-1
5«1fr1
i'.!
4.71(H
3.9-lo-t
Caif;iris
Hftmaitiim
?.9-to-1
RvoriiJ i
2.4101
'vertLira
2.1-tol
2 2-tO l
i'j?
t.Mol
California's system oflocal government finance limits the amount of
revenue generated by housing and encourages local communities to
C &CA'T*«ir! M
Ml ciir>IO'iMfert
C Mtlfrtinyt
aiti
fevor sales tax generating retail development over residential or other
forms ofcommercial development. The importance ofsales tax revenue in relation to
other revenue sources is generally cited as the main force driving what has become
known as the fiscalization ofland use. The added cost of paying for facilities that
were once shared across the entire community increases the cost of housing, pushing
homeownership further out ofthe reach of young families and others of modest
s'caro
evjKit:
sjjaeen
means.
Other Factors Adding To California's Housing Crisis Include:^
Housing Assistance at Federal Level Fails to Meet California's Needs
Federal support for housing has declined since the 1970s. California received fewer
federal housing assistance dollars in 1999 for each individual living below the federal
poverty level than all but one ofthe ten largest states. While the federal government
spent, on average, $286 on housing assistance for each person in poverty, California
received only $171 per person in poverty.
Demand for federally-support assistance is intense. A recent survey oftwenty local
housing authorities found 371,740 femilies were on waiting lists for Section 8 assistance,
more than three times the 104,133 femilies receiving assistance. The survey found 93,632
femilies wait listed for 25,268 units of public housing.
A significant firaction ofthe state's federally subsidized housing units are reaching the
expiration dates oftheir contracts to maintain affordability. In the past three years,
^ Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
® Excerpts frcxn Locked Out: CalifcMmia's Affordable Housing Crisis. CalifOTnia Budget Project May 2000
California has lost more than 15,000 afiFordable housing units to opt-outs and
prepayments, a total of 11 percent ofthe federally assisted inventory, with most ofthe
losses occurring in Los Angeles, Orange, San Diego, and Santa Clara Counties. The state
Department ofHousing and Community Development estimates that more than 180,000
units may be at risk ofconversion from affordable to market rents over the next decade.
State Housing Spending Lags Need
Over the last decade, California has gone from being a leader ofinnovative state housing
policy to a laggard. During the late 1980s, California implemented a series ofinnovative
housing programs and provided substantial fimding for its housing efforts. Among the
state's signature initiatives were creation ofthe first state housing trust fimd in 1985,
creation ofa state supplement to the federal low-income housing tax credit in 1987, and
passage ofthree affordable housing bonds in 1988 and 1990.
State housing spending dropped substantially during 1990s from 0.7 percent of total
spending in 1990-91 to 0.2 percent oftotal spending in 1999-00. During the early 1990s,
bond proceeds supported a substantial investment in affordable housing. However, as
these fimds disappeared only minimal state support was allocated to take their place.
While the 1999-00 budget include several modest initiatives, the absolute number of
dollars allocated to housing and related programs is less than halfthat of a decade ago.
The 2000-01 Budget marked a reversal in that trend, with the largest ever allocation of
state support for housing. Spending proposed in the Governor's 2001-02 Budget brings
spending for housing back to its 1991-92 level, which is still significantly below 1990-91.
Housing spending peaked in 1990-91 as the state spent fimds authorized by a series of
bond measures in the late 1980s.
SUb HomiFii Expondiuiw C^hng Up <o DKade OM UmiIs
.
_
CM.
'55
&
{CM
s
I
C.IM
w
•MM
«■ at
«K-K
MBC-C
Wr-M
1IM-I*
tM»4*
3HC-CI
JM«4r
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a booming economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent ofCalifornia households owned their own homes in 1999,
compared to 66.8 percent for the nation as a whole.
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent of households could afford to purchase the median priced
home in 1999, as con^ared to 37 percent ofCalifornia households. The median
California household earns less than two-thirds the income needed to purchase the
n^dian priced home.
Housing Affoidabiity in CatiloinUis Well BelowtheN^wnalAveidge
I
."TV
21V.
iMn
i«si
isah
'imj
16«2
H oitting AffordabiIiiy Varies Wid ely Across C afHorn I a
7C<» T
£C^ • •
^ ^ ^ ^^ ^
...
41%
STk
.
.
.
■"1
;s>-*
trt
O ■
.
*«ftx-
.— m—
37».
i
•
V:.
:c=« -•
m
.■
-
.
.
.s
.s
f;::,
^
^
^
■
"
• i-f U;4 y^.-.
^
j"*
y
y
,/ / /
/
.«-; -j,.,.
The National Association of Home Builders found that eight of the nation's ten least
affordable housing markets in the fourth quarter of 1999, and 14 of the top 25, were in
California. Overall, these 14 markets accounted for more than two-thirds (72 percent) of
the state's total population. The least affordable markets include virtually all of
California's coastal metropolitan areas from Santa Rosa to San Diego. Surprisingly, the
Stockton-Lodi metropolitan area also was included among the 25 least affordable
metropolitan areas. The Merced, Chico, Sacramento, and Yolo metropolitan areas also
ranked among the nation's 50 least affordable areas.
F«Mrer Cailforiila Harms ore AffAidoble to Median Income Heoseholde
<>«>m
]«)S
.w
srt
—T
Lua (.tea:
SI'S.
>>!-«
S«r f'ic.*
ai<aai>.c
•«v
.d
>iv
--L^ b.:.!..
T-»
aas
California Spends Less on Housing than Other Major States
Califomia's commitment to affordable housing is substantially less than many other states,
in both absolute terms and as a share oftotal state spending.
■ California is one of33 states >^th housing trust funds. Califomia's fund receives a $2
million per year allocation from the proceeds ofoil lease payments on state tidelands,
less than the initial $5 million allocation made in the mid-1980s.
■
Overall, California allocated $109.6 million for housing programs in 1999-00, including
$40 million in limited term ^sistance to the School Facilities Fees Assistance program
and $33.5 million in Low Income and Farmworker Housing Tax Credits. Other states
with much smaller populations spent significantly more:
o • Florida. WWi less than halfthe population ofCalifornia, Florida allocated
$149 million for housing programs for low and moderate income frmilies in
1999-00. The primary source ofsupport for Florida's housing programs
comes from a documentmy stamp tax levied on real estate transfers. This tax
provides an ongoing source ofsupport for Florida's housing trust fimd,
including $146 million in 1999-00.
o • Massachusetts. In 1998-99, Massachusetts allocated $187 million for
housing. Major program initiatives include $31 million in state support for
public housing authorities, $39 million for rental assistance programs, and
$7Tmillion for capital investments.
o • Illinois. Illinois supports its housing trust fimd with a dedicated real estate
transfer tax. The tax raised $21 million in 1998; a sum that exceeds
Califomia's support for similar programs targeted at low and moderate
income fonulies.
o • Washington. With a population one-sixth as large as Califomia's,
Washington state's housing spending is comparable to that of California. The
centerpiece ofthe state's ejqpenditures is a housing trust fimd supported by a
combination ofdedicated revenues and appropriations from the state's
capital budget. The fimd provided $62 million in support for housing
constmction and preservation programs dumg the state's 1999-00 biennium,
plus $5 million for homeless feinilies and $8 million for farmworker
housing.
o • New Jersey. New Jersey allocated $48 million in state support for housing
programs in 1999-00. Ofthis amount,$29 million comes from a dedicated
real estate transfer tax that provides an ongoing source offimding for the
state's affordable housing programs.
o • Oregon. Oregon, with a population of3.3 million, allocates interest eamed
on renters' security deposits to a trast fimd used to support low income rental
housing. In 1997-98,the fimd received $4.5 million, approximately equal to
Califomia's multifemily housing spending in the current budget year.
Support Provided Through the Tax Code Favors Higher Income Households
The vast majority ofpublic support for housing, at both the state and federal levels,
comes in the form oftax deductions for mortgage interest and property taxes and
preferential treatment of gains realized when a home is sold. By allowing ta3q)ayers to
deduct the interest they pay on the money borrowed to purchase a home and property
taxes paid, the tax code reduces the after-tax cost ofhousing. Not only do these
deductions provide substantial assistance for those who own their own homes,they
provide more fevorable treatment for investments in homeownership relative to other
types ofinvestments.
Regulatory constraints
Raising the Roof: California Housing Development Projections and Constraints 19972020. a report prepared by the California Department ofHousing and Community
Development in May 2000 makes the^ observations about regulatory constraints.
■
Local Regulation is Kev: Califomia has ample supplies ofenvironmentally
appropriate land to accommodated projected housing growth. Whether
developers and homebuilders will be allowed to access that land will depend on
whether adequate amounts ofit are designated for residential development, and
how the development approvals process is administered in California's 535
governments.
■
■
Nation's Most Complicated Development Process: California's development
process involves more review steps, and more potential discretion in those steps,
than that ofany other state.
Trends since the Earlv 1970s: Two trends have shaped the development review
process in Califomia since the early 1970s.The first is a trend away from longterm comprehensive planning approaches and toward short-term, impact
assessment/development management approaches. The second is a trend toward
■
increased local discretion in development decision-making.
Local Process 'Anti-Housing': The effect ofthese changes was to make the local
development review process in Califomia anti-housing. CEQA provided an openended vehicle for individuals and groups opposed to growth-ofwhich housing is
the prevalent manifestation-to increase the risks and costs inherent in the
approvals process, and to shift those increased risks and costs entirely to project
sponsors. CEQA also established the current practice ofreducing project
densities, and thus indirectly total production, as a means ofgaining project
approval; Proposition 13 encouraged the practice now known as "fiscal zoning"
by which cities encourage the development ofrevenue-rich land uses such as
shopping centers, and discourage the development ofservice-intensive land uses
like housing.
Santa Clara County
High Cost ofHousing
Silicon Valley housing prices are among the highest in the United States. An average
single-family home cost $617,000 as ofMay 2000, an increase of87 percent from just
five years ago when the average house cost $329,000.' The average price ofa single
family home increased by 31 percent between May 1999 and May 2000.^
According to recent data from the California Association ofRealtors, the median price of
a home in Santa Clara County in May 2001 was $532,500, almost one percent more than
the median price of$528,000 from a year ago. Sales in Santa Clara County increased by
.5% between April and May ofthis year but have dropped 38.9% over the past year.
"After nearly a year and a half ofdouble-digit increases, the median price ofa home in
the San Francisco Bay Area rose only 3.4 percent in May(2001)compared to a year
ago," said Leslie Appleton-Young, C.A. R.'s(California Association ofRealtors) vicepresident and chiefeconomist."While there's stiU robust demand for entry and mid-level
homes, the upper end ofthe market is definitely feeling the impact ofthe volatile tech
economy in the Silicon Valley. That said, a median-priced home in the Silicon Valley is
still over a half-million dollars."
The percent ofhouseholds that can afford a median priced home in California fell from
36 percent to 30 percent between 1999 and 2000. In the Bay Area that percentage fell
from 24 percent to 16 percent. Nation-wide, a httle over 50 percent ofhouseholds can
afford to buy a median -priced house in their area.®
Housing Stock
Single-family homes make up almost two-thirds ofthe Silicon Valley's housing stock.
Negative Impacts
A recent suiwey conducted by the Santa Clara County Planning Office reveals that one of
the most negative impacts ofhigh housing costs is the deterioration ofthe county's social
infrastructure." Not only are teachers, police officers and firefighters finding it difficult
to afford living in this county, nurses, doctors, other health care providers, clergy, bus
drivers, day care workers, retail sales clerks, restaurant staffi maintenance stafi^ nursing
home staff school crossing guards, government enployees, school principals and many
others are moving out ofor unable to afford to move into this coimty."
^ Silicon Valley Projections 2000, Silicon Valley Manufecturing Group
* Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
'
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
""Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1,2001
"Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1, 2001
It may be this steady erosion ofour county's infrastructure that most threatens Santa
Clara County's future, because it adversely affects virtually all ofthe fundamental
systems that contribute to our quality oflife. It affects the quality ofom education
system, our health care system, our emergency services, our transportation system, our
local government services, and ultimately the health ofour new economy.
Fiscalization ofLand Use
Revenues for Silicon Valley cities are catching up with population and employment
growth,though revenue sources have shifted away from sales and property tax.''^
What do experts predict about the housing market?
"It feels to me like the market has crested." Brad Inman, CEO,HomeGain quoted in San
Francisco Magazine, November 2000
"As long as salaries go up and some home buyers can pay cash for homes, prices will go
up"Ira Serkes, coauthor ofHow to Buv a House in California, quoted in San Francisco
Magazine, November 2000
"Once jobs begin leaving, home prices will moderate." Leslie Appleton-Young, Chief
Economist, Califomia Association ofRealtors, quoted in San Francisco magazine,
November 2000
Density
Last year Silicon Valley cities approved new residential development at an average of13
units per acre, compared with 10.3 units per acre in 1999.'^
Land Use
In 2000,24% ofSilicon Valley and its perimeter were permanently protected open spacethe same as in 1999.'^
With appropriate reserves being maintained, Los Angeles, Orange and Santa Clara
counties will lack sufBcient vacant suburban land to accommodate projected household
growth through 2010.
The total land supply currently identified in Silicon Valley as having potential for
housing production totals 10,600 acres. Based on current local policy and market '
conditions, this land supply could yield over 74,300 new homes. However,this fells well
below projected demand, based on current employment growth projections. The gap
between potential supply and projected demand could be greatly reduced by both
""Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
OfiBce June 1,2001
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2001 Index ofSilicon Valley
""Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept ofEconomics, Califomia State University, Fullerton April 2001
10
increasing land supply and the number ofhomes built per acre. The current projected
supply ofnew homes in Silicon Valley only meets 50-66 percent ofprojected demand.
Just by increasing the number ofhomes built per acre from the current projected average
ofseven to nine per vacant acre and from 12 to 25 homes per reuse acre, the region could
meet 75-99 percent ofdemand.'^
Approximately 40 percent ofpotential futxire housing development in Silicon Valley will
be on land that is ciuxently imderutilized, rather than vacant.
Halfofthe cities in the Silicon Valley already estimate that reuse sites will provide more
opportunities for new home construction than vacant sites. These cities include San Jose,
Milpitas, most ofthe large cities in northwest Santa Clara Coimty(including Cimertino,
Palo Alto and Sunnyvale), and all ofthe cities in southern San Mateo County.
Planners in most Silicon Valley communities acknowledge that they have not done a
comprehensive survey ofpotential reuse sites, and that the potential number ofnew
homes that could be built on these types ofsites will increase significantly beyond current
e^imates ifcities take better advantage ofreuse opportunities.^'
As of1996, Santa Clara Coimty had 297,576 acres ofpotentially developable land.^^
From 1985 tp^l995, Santa Clara County redeveloped and reused 7,190 acres ofland,
5,780 acres for residential uses(80.4 %).^^
Housing Production
In Santa Clara County, housing construction and rehabilitation, as measured by issuance
ofresidential permits, sponsored by the various redevelopment agencies within the
County, created 11,600 units ofhousing(8380-new, 3,220-rehab)from 1988-1996.^''
Substandard Housing
In Santa Clara's Turban County(Cities ofCampbell, Cupertino,Los Altos, Los Altos
Hills, Los Gatos, Monte Sereno, Saratoga and unincorporated areas)34% ofall
ownership households(based on 1990 census figures)required some form of
rehabilitation.^^
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prq)ared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Ibid.
^ Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manu&cturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Comnninities: Housmg Solutions fOT Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt AUiance by Strategic Economics,November 1999
^ Raising the Ro'of: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousmg and Community Development May 2000
^ Raising the Roof: California Housing Development Proiections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
Rising the Roof: California Housing Development ftoiections and Constraints 1997-2020, California
Department ofHousing and Community Development May 2000
Santa Clara County Consolidated Plan for the period 2000-2005, May 2000
11
Substandard or inadequate housing poses a health and safety threat to its occupants,
especially children. Potential risks include: asthma and other respiratory and chronic
diseases, increasing the risk ofinjury, the likelihood ofbecoming homeless and a myriad
ofother problems including more exposure to violence.^^
Jobs/Housing Imbalance
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s.^' ABAG reports for 1995-2000 an average coimtywide ratio ofnew jobs to new
housing units of6 to 1, vwth the five highest being in Santa Clara, Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
countywide ratio ofnew jobs to new housing units of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara,Palo Alto and Moimtain View.^®
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo County produced 0.7jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^^
More than 70 percent ofSilicon Valley's total employment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos HUls, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^®
Over the next 20 years(2000-2020)between 66 and 72 percent ofhousing demand will
be in San Jose/Milpitas and northwest Santa Clara County,the same areas projected to
capture approximately 67 percent ofSilicon Valley's total new job growth.^'
More than 70 percent ofSilicon Valley's total employment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
The most severe jobs/housing imbalances are in northwest Santa Clara County, where
several large employers are located, and in Scotts Valley, which has two major employers
and a small residential population. These areas are not unique. The ratio ofjobs to
"Not Safe At Home: How America's Housing Crisis Threatens the Health ofIts Children"the Doc4Kids
Project, Boston Medical Center, Feb. 1998
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
ABAG Projections 2000
ABAG Projections 2000
ABAG Projections 2000
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manu&cturing Group and Greenbelt Alliance by Strategic Economics,November 1999
12
employed residents is increasing in Silicon Valley and is likely to continue over the next
tenyears.^^
Overall employinent in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000jobs, including
replacement for the 22,000jobs the region is estimated to have lost between 1990 and
1995. Over one-halfofalljobs add^ in the region from 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in silicon Valley indicate that the incredible job growth currently being e^qjerienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
mbre between 2010 and 2020,down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
Factors Contributing to Housing/Jobs Imbalance
The imbalance is due in large part to outside factors that are shaping the zoning and
density decisions ofarea cities. Three ofthose fectors are ofparticular significance.
1. The first is what is called the "fiscalization ofland use". Since the passage of ,
Proposition 13 in 1978, city services funded by property tax revenues such as
street repair and park maintenance, have been severely constrained. Commercial
development now looks more attractive than residential. Not only do commercial
developments require fewer city services, they oftpn generate sales tax revenues
that can be used to fund local services.^^
2. A second fector is the differing expectations people have regarding commercial
and residential development. Because ofthe demand for more office space and
because it is difficult for cities to say no to more jobs for their residents, it is often
easier to win approval ofcommercial developments.^^
3. The third fector is community opposition to higher residential densities. To
achieve greater parity between the number ofjobs and homes, cities could build
housing more compactly. But public perception ofhigher density housing is
generally negative due to aspiration ofthe "American Dream"for single- femUy
home and real or perceived filings ofolder high-density developments.
Consequeritly, most local policies call for lower density development and
discourage attached multi-story housii^.^'
Population Growth
ABAG population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow down. Overall, the Valley's population is projected to increase by about 1f percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010, and 3.6 percent growth between 2010-2020. The cities
Silicon Vall^ftojections 2000, Silicon Valley Manu&cturing Group
^ Building Sustainablei Communities: Housing Solutions for Silicon Valley. Prepared for the Silic<Hi
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Silicon Valley Projections 2000, Silicon Valley Manu&cturing Group
Silicon Valley Projections 2000, Silicon Valley Manufecturing GrOup
Silicon Valley Projections 2000, Silicon Valley Manufecturing Gro
13
e}q)ected to experience the most dramatic population increases between 2000 and 2020
are Morgan Hill(30 percent) and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda Coimty.^®
Based on Census 2000 data, overall population growth in Santa Clara County was 12.4%.
Morgan Hill(40.2%), Gilroy(31.7%, Cupertino (25.5%), Milpitas(23.7%)and San
Jose(14.4%) were the top five highest growth areas.''®
Current county population projections show that Santa Clara County's overall population
over the next 20 years will increase by 3%,adding close to 54 million more residents.'"
Strategies for Solutions
In November 1999,the Silicon Valley Manufacturing Group and Greenbelt Alliance
joined forces to produce "Building Sustainable Communities: Housing Solutions for
Silicon Valley". In that report they make the following recommendations:
1. Silicon Valley cities should systematically identify underutilized sites that can be
redeveloped with new homes.
2. Even relatively small increases in the number of homes that can be built per acre
will have a dramatic impact on the overall level ofhousing supply in Silicon
Valley.
3. Supplemental Action Items:
a. Cities should make an explicit commitment to good design and promote
' design principles that result in developments that both fit into their
surroundings and support existing neighborhoods.
b. Cities should educate citizens about community issues as part ofa process
for making choices about the fiiture.
c. Many ofthe barriers to creating more housing can only be removed if
cities work together.
The California Department of Housing and Community Development suggests:
One way to bring overall housing prices down would be through a significant increase in
the housing supply, primarily through well-planned, infill development designed to create
livable, transit-and pedestrian-oriented neighborhoods(notjust individual, isolated
housing developments). T be truly affordable, much ofthe housing in such developments
must be ofhigher density. The increase in suppfy must be sufficient not only to help
overcome existing shortages but also to keep pace with new jobs that are created in this
country.''^ Excluding land that is wetland, prime and unique fermland,flood-zone, and
Building Sxistainable Communities: Hoxising Solutions for Silicon Valley. Prepared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
California Department, ofFinance, Research Demographic Unit, California State Census Data Center,
Census 2000
California Department, ofFinance, Research Demographic Unit, California State Census Data Center,
Census 2000
Interim Count Population Projections, California Department ofFinance Demographic Research Unit
June 2001
"Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1, 2001
14
areas most suitable to large number ofendangered species and assuming a marginal
density of5.3 households per acre(15.8 persons), Santa Clara could meet 127% ofits
housing need.'^^
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
15
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING BROADLY DEFINED:
SUPPLEMENTAL MATERIALS
LIVABLE
ENVIRONMENT
GOAL 6: PRESERVE OPEN SPACE We increase the amount of permanently protected open space, publicly accessible parks and green space.
24% of Valley and Perimeter Is Permanently Protected Open Space
WHY IS THIS IMP0RTANT7
PROTECTED OPEN SPACE IN SILICON VALLEY AND PERIMETER
Preserving open space protects natural habitats, provides recre
ational opportunities, focuses development and safeguards the
visual appeal of our region.
This indicator tracks lands permanently protected through pub
lic ownership or conservation easements in Silicon Valley and its
perimeter. •
HOW ARE WE DOING?
In 2000, 24% of Silicon Valley and its perimeter was permanently
protected open space. This includes roughly 465,000 acres in
Santa Clara, San Mateo and Santa Cruz counties and Alameda
1#
ANTA
County south of Oakland.
ARA
Fifiy-seven percent of this permanently protected open space
is accessible to the public. Within these publicly accessible lands
are 645 miles of trails for hiking, biking and horseback riding.
lA
Si
1S31 PERMANENTLY PROTECTED OPEN SPACE LANDS
Source: Greenlnfo Network
LIVABLE ENVIRONMENT
i'131 .i
,T
goal 7: EFFICIENT LAND REUSE Most residential and commercial growth happens through recycling land and buildings in
developed areas. We grow inward, not outward, maintaining a distinct edge between developed land and open space.
Efficiency of Land Used for Housing Increases
AVERAGE UNITS PER ACRE OF NEW RESIDENTIAL DEVELOPMENT,
WHY IS THIS IMPORTANT?
By directing growth to already developed areas, local jurisdictions
can reinvest in existing neighborhoods, use transportation systems
more efficiently and preserve nearby rural settings.
SILICON VALLEY
■
1?
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that new housing devel
opments are using scarce land resources more efficiently. During
2000, Silicon Valley cities approved new residential developments
at an average of 13 units per acre. This compares to an overall
regional ratio of 4.9 housing units per acre.
10
b:
a
"
fl
as .
u
Bm
_
The 2000 figures are a significant increase from the prior two years
— 10.3 units per acre in 1999 and 6.6 units per acre in 1998.
Urban service areas expand when cities annex land and provide
infrastructure services such as water, sewer and roads. In 2000,
1998
1999
2000
Source: Valley Transportation Authority, Congestion Management Program:
City Planning Departments
Silicon Valley's urban service area expanded by 234 acres within
the City of Morgan Hill.
GOAL 6: preserve open space We increase the amount of permanently protected open space, publicly accessible parks and green space.
Permanently Protected Open Space in Silicon Valley
and Surrounding Area Increases
WHY IS THIS IMPORTANT?
Preserving open space protects natural habitats, provides recre
ational opportunities, focuses development and safeguards the
PROTECTED OPEN SPACE IN SILICON VALLEY AND PERIMETER
visual appeal of our region.
This indicator tracks lands permanently protected through pub
lic ownership or conservation easements. This is the second year
that open space data have been collected for Silicon Valley and
a.
ME
its perimeter.
HOW ARE WE DOING?
In 1999, 25% of Silicon Valley and its perimeter was permanently
protected open space, up from 23% in 1998. This includes
473,717 acres in Santa Clara, San Mateo and Santa Cruz counties,
and Alameda County south of Oakland.
3-
TA
Fifty-six percent of this permanently protected open space is
accessible to the public (266,334 acres.)
The largest single open space acquisition in 1999 was the Tmst
for Public Land's purchase of 10,400 acres of Coast Dairy. The
second largest acquisition was made by the new Santa Clara Valley
Open Space Authority and The Nature Conservancy purchasing
8,482 acres of Lakeview Meadows. The Peninsula Open Space
3^
Trast also made major purchases of open space in 1999, including
Rancho Canada De Oro.
1^1 PERMANENTLY PROTECTED OPEN SPACE LANDS/1998-23% OF AREA; 1999-25%
Source: Greenlnfo Network
LIVABLE
ENVIRONMENT
® QAL 7: EFFICIENT LAND RE-USE Most residential and coinmercial growth happens through recycling land and buildings in
developed areas. We grow inward, not outward, maintaining a distinct edge between developed land and open space.
Efficiency of Land Used for Housing Increases
WHY IS THIS IMPORTANT?
Directing growth into already developed areas provides more
AVERAGE UNITS PER ACRE OF NEW RESIDENTIAL DEVELOPMENT,
SILICON VALLEY
efficient use of land and infrastructure resources than does
sprawling into green areas and building more infrastructure. By
directing growth to already developed areas, local jurisdictions
can reinvest in existing neighborhoods, develop more efficient
transportation systems and preserve nearby rural settings.
12 ■
10 ■
HOW ARE WE DOING?
A survey of 26 Silicon Valley cities found that scarce land resources
are being used more efficiently for housing. During 1999, Silicon
Valley"cities approved new residential developments at an average
of 10.3 units per acre. In 1998, the average of new residential
development was 6.6 units per acre. This compares to an overall
regional ratio of 4.9 housing units per acre.
Urban service areas expand when cities annex land and provide
infrastructure'services such as water, sewer and roads. In 1999,
Silicon Valley's urban service area did not expand.
1998
1999
Source: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 8: LIVABLE COMMUNITIES We creace vibrant communities where housing, employment, places of worship, parks and services
are located together, and are all linked by transit and other alternatives to driving alone.
37% of New Housing, 32% of New Jobs Are Located Near Transit
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
stations and major bus corridors reinforces the creation of
compact, walkable communities linked by transit. This helps
to reduce traffic congestion on Silicon'Valley freeways.
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that 37% of all new '
40% ■
housing units approved in 2000 were located within one-quarter
mile of a rail station or major bus corridor. Thirty-two percent of
30% ■
new commercial/industrial developments were also located within
one-quarter mile of transit, representing 15,700 potential new jobs.
20% •
Approvals near transit declined from the previous year when
57% of new housing units and 35% of new jobs were located
near transit.
1998
2000
1999
I PERCENT OF HOUSING UNITS
I PERCENT OF JOBS
NEAR TRANSIT
NEAR TRANSIT
Source: Valley Transportation Authority, Congestion Management Program;
City Planning Departments
LIVABLE
ENVIRONMENT
GOAL 9: housing choices We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
Approvals for New Housing Fall by 50%; 1,600 New "Affordable" Units Approved
WHY IS THIS IMPORTANT?
TOTAL NEW HOUSING UNITS APPROVED, INCLUDING
NEW AFFORDABLE HOUSING UNITS, SILICON VALLEY
Our economy and community life depend on a broad range of
jobs. Building housing that is affordable,to lower- and moderateincome households provides access to opportunity and maintains
balance in our communities. This indicator measures housing units
approved for development by Silicon Valley cities in each fiscal
year; this is a more "upstream" measure than actual housing starts.
14,000 ■
12,000 -
10,000 ■
HOW ARE WE DOING? .
8,000 ■
The number of new housing units approved for development by
Silicon Valley cities fell by more than'50%, from 12,060 in fiscal
year 1999 to 5,370 in fiscal year 2000.
Despite this overall decrease, the number of new affordable
housing units approved remained around 1,600. This number
6,000 4,000 ■
2,000 -
represents 31% of total net new housing units approved.
Affordable rental housing is for households making up to 60%
of the median income. These units are primarily developed by
nonprofit housing developers or units set aside as "affordable"
in market-rate developments.
1998
1999
I NEW HOUSING UNITS
Source: CUy Planning Departments
2000
I AFFORDABLE UNITS
GOAL 11: TRANSPORTATION CHOICES We overcome transportation barriers to employment and increase mobility by investing
in an integrated, accessible regional transportation system.
Per Capita Transit Ridership Shows Improvement
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA AND SAN MATEO COUNTIES, PER CAPITA
WHY IS THIS IMPORTANT?
A larger share of workers using alternatives to driving alone
indicates progress in increasing access to jobs and in improving
the livability of our communities. Pedestrian- and transit-oriented
development in neighborhoods and employment and shopping
centers increases opportunities for walking, bicycling and using
public transportation instead of driving.
HOW ARE WE DOING?
1990
1991
1992
1993
1994
1995
1996
1997
1998
SHARE OF SILICON VALLEY COMMUTERS USING
VARIOUS COMMUTE MODES, 2000
B Drive Alone 78%
B Share Ride 15%
B Use Transit 4%
B Walk/Bike 2%
B Other 1%
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,
RIDES for Bay Area Commuters
'Estimate
1999
2C00»
Per capita transit ridership improved in 2000, increasing from
33.3 annual rides per person in 1999 to 34.3 in 2000. Total rider
ship increased 4%,from 81 million in 1999 to 84.6 million in
2000. Ridership increased on Caltrain, Light Rail and SamsTrans
bus service, but decreased slightly on VTA buses.
Not counted in the above per capita,data is ridership on the
i^tamont Commuter Express(ACE). Train service from Stockton
to San Jose started in October 1998. As of November 2000, ACE
carries 2,100 westbound passengers daily.
A year 2000 survey of Valley commuters found that 78% drove to
work alone, a 1% improvement since 1999. Two percent walked
and biked, up from 1.5% in 1998. The share of commuters carpooling and using transit remained constant at 15% and 4%,
respectively.
12% of Households Can Access Major Job Center by Transit in 45 Minutes
WHY IS THIS IMPORTANT?
AREAS WITHIN 45 MINUTE COMMUTE BY TRANSIT
The ability to access major job centers in Silicon Valley by transit
is important for decreasing congestion and for connecting all people,
including the working poor, to quality job opportunities. Regions
TO MAJOR JOB CENTER
increase opportunities for all workers to access quality jobs by invest
ing in transit and by locating workplaces and housing close to transit.
This new measure of transit accessibility indicates the percentage
of all Santa Clara County households that can access a major
employment center within a 45-minute transit commute. There
are 12 major employment centers in Santa Clara County. This
indicator focuses on the Great America Parkway employment
center located in the triangle between Highways 101, 237 and
880. The center was selected because of its concentration of
high-tech workplaces and because its suburban location makes
it representative of similar employment centers in the region.
HOW ARE WE DOING?
Twelve percent of households in Santa Clara County could access
the Great America Parkway employment center within a 45-minute
commute by transit.
f
Since 80% of all households in the County are within a 1/4 mile
of some type of transit stop, most househoids could reach this
employment center by transit, but it would take longer than
45 minutes.
ESa GREAT AMERICA PARKWAY JOB CENTER
Ml AREAS WITHIN 45 MINUTE COMMUTE BY TRANSIT
Source: Valley Transportation Authority, Congestion Management Program
30% of Valley's Freeway Miles Receive Worst Rating
WHY IS THIS IMPORTANT?
Traffic congestion is a key factor affecting quality of life. Traffic
congestion is a function of overall economic activity and regional
design — the location ofjobs and housing and the availability of
other travel options, such as public transit, carpooling, biking,
walking and telecommuting.
This indicator shows the number and share of freeway miles
operating at service level "F" during the afternoon peak travel
time. Level "F" is the worst possible rating and means forcedflow traffic with travel speeds of less than 35 miles per hour.
35%
30%
25%
20%
15%
HOW ARE WE DOING?
In 2000, 30% of total freeway miles in Santa Clara County
received the worst possible congestion rating. In 1991, only 15%
of freeway miles were given a rating of F. Congestion dropped
significantly in 1995 because of an increase in freeway capacity,
10%
1991
1994/95
1996
1997
including high-occupancy vehicle(HOV)lanes, but has increased
ever since.
Source: Valley Transportation Authority, Congestion Management Program
1998
2000
LIVABLE
ENVIRONMENT
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located,together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
WHY IS THIS IMPORTANT?
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
Focusing new economic and housing development near rail
stations and major bus corridors reinforces the creation ofcompact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
HOW ARE WE DOING?
Silicon Valley cities are.approving more residential and commercial/
industrial development near rail stations and along major bus
corridors.
30% ■
In.1999,57% of all new housing units approved by Valley cities
were on property within one-quarter mile ofa rail station or major
10% ■
Percent of New Housing Units
Near Transit
Percent of New Jobs
- Near Transit
bus corridor. Thirty-five percent of new commercial/industrial
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit.
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
14,000-
WHY IS THIS IMPORTANT?
Our economy and community life depend oii a broad range of
jobs. Building housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
in our communities.
12,000 ■
HOW ARE WE DOING?
10,000 ■
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
8,000 ■
6,000-
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
4,000 -
the 10,600 units approved were affordable.
2,000 ■
0-
1998
I NEW HOUSING UNITS
1999
I AFEORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households onrthe Santa Clara County Housing Authority's
waiting list for affordable housing.
LIVABLE
ENVIRONMENT
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
stations and maj'or bus corridors reinforces the creation of compact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
ennr.
HOW ARE WE DOING?
Silicon Valley cities are approving more residential and commercial/
industrial development near rail stations and along major bus
corridors.
30% ■
In 1999, 57% of all new housing units approved by Valley cities
20% ■
were on property within one-quarter mile of a rail station or major
10% -
Percent of New Housing Units
Near Transit
Percent of New Jobs
. Near Transit
bus corridor. Thirty-five percent of new commercial/industrial
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit.
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
14,000 ■
WHY IS THIS IMPORTANT?
Our economy and community life depend on a broad range of
jobs. Buildirig housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
in our communities.
12,000 ■
HOW ARE WE DOING?
10,000 -
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
8,000 -
6,000 -
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
the 10,600 units approved were affordable.
4,000 -
2,000 -
0-
1998
I NEW HOUSING UNITS
1999
I AFFORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households on the Santa Clara County Housing Authority's
waiting list for affordable-housing.
GOAL 16:. transcending boundaries Local communities and regional authorities coordinate^their transportation and land
use planning for the benefit of everyone. City, county and regional plans, when viewed together, add up to a sustainable region.
;i
Permit Streamlining Sets Stage for More Regional Collaboration
WHY IS THIS IMPORTANT?
Collaboration across government jurisdictions in Silicon Valley
requires developing innovative approaches to sharing information,
setting mutually beneficial goals and progressing together. This
indicator tells the story of how local jurisdictions have collaborated
to upgrade, standardize and link new approaches to permitting.
This experience sets the stage for future collaboration in areas
such as land use and infrastructure planning and management.
90%
80%
60%
HOW ARE WE DOING?
A survey of 18 Silicon Valley cities found that 80% continue to use
the standardized Unifofrn Building Code amendments that were
developed during the mid 1990s jointly by municipal building
officials and the Joint Venture Regulatory Streamlining Council,
and that 45% use the recently developed standardized building
permit form. Sixty percent of local cities are participating directly
or indirectly in the Joint Venture Smart Permit Project with 45%
already offering web-based permitting.(Web-based services include
application submissions, payments, status tracking, information
10%.
Use Uniform
Participate
Use Standardized
Olfers Web-Based
Has Geographic
Building Code
in Smart Permit
Building Permit
Permitting
Information
Standard
Project
Form
Amendments
Source: Silicon Vallev Cities
sharing and citizen response.)
Ninety percent of cities have or are developing a Geographic
Information System for land use and infrastructure planning,
infrastructure management, public safety and other municipal
services. The next challenge will be to use the lessons from
the Smart Permit Project to ensure that municipal GIS data
is available for regional analysis and information sharing.
The 18 cities that participated in the survey include 84% of.
the Valley's population.
20%
'
Svstem
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY Valley cities, counties and Other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
Government Revenue and Capital Expenditures Catching Up with Economic Growth;
, Revenue Sources Shift
GROWTH OF REVENUES AND CAPITAL EXPENDITURES OF SILICON VALLEY'S
CITIES COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
WHY IS THIS IMPORTANT?
To maintain service levels, local government revenues and expen
ditures must keep pace with population and job growth. This
indicator compares growth in the revenues and capital expen
1.50
ditures of Silicon Valley cities relative to growth in population
and employment.
1.40
1.30
HOW Are WE DOING?
Growth in the combined revenue of all cities in Silicon Valley
has been catching up with population and', employment growth.
1.20
?<
1.10
Adjusted for inflation, total revenue increased 49% from fiscal
1.00
year 1988 to 1998, from $1.3 billion to $2.0 billion. During this
period, demand for services, as measured by ,increases in popu
0.90
lation and employment, increased by 58%.
Cities increasingly rely on other taxes (e.g., utility, hotel) and on
other revenue sources (e.g., fees) to stabilize and grow revenue
aligned with demand for services. Sales and property taxes do
not always track growth in population, employment and wealth. .
0.80
1988
1989
1990
1991
1992
I TOTAL REVENUE
1993
1994
1995
1996
1997
1998
CAPITAL EXPENDITURE
Ml POPULATION AND EMPLOYMENT
In 1998, 70% of total revenues were based on sources other than
sales and property tax, compared with 63% in 1988.
REVENUE SOURCES FOR SILICON VALLEY CITIES
15%
Sales tax revenues are determined by retail expenditures and by
sales tax-generating commercial and industrial activities. Property
taxes lag economic growth, and have actually declined by 1% in
10%
real terms since 1988 because of Proposition 13 restrictions on
increases in assessed valuation.
22%
44%
48%
In 1998, capital expenditures continued their upward trend
started in 1997. Between 1988 and 1996, annual capital expendi
tures of Valley communities did not keep pace with population
22%
and employment growth, decreasing in real terms by 10% overall. ■
Since then, aggregate capital expenditures jumped 52%.
1988
■■I SALES TAX
PROPERTY TAX
1998
I OTHER REVENUE SOURCES
I OTHER TAXES
Source: Slate Controller's Reports.
(g)
matching resources and responsibility .Valley cities, counties and other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
After Years of Falling Behind, Goyernment Capital Expenditures Increase 30%
WHY IS THIS IMPORTANT?
GROWTH OF CAPITAL EXPENDITURES OF SILICON VALLEY'S CITIES
COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
. To maintain service levels, capital expenditures by local govern
ment must keep up with both population and job growth. Capital
expenditures fund road, bridge and storm drain construction and
maintenance; police and fire equipment; water and sewer system
1.35 ■
improvements; and parks, libraries and community facilities.
1.25 ■
HOW ARE WE DOING?
In 1997, capital expenditures increased draitiaticallyj reversing
V
1.15 ■
Y'
the previous downward trend.
Between 1988 and 1996, annual capital expenditures of Valley
communides did not keep pace with population and employment
growth, decreasing in real terms by 10% overall. In 1997, aggregate
1.05 -
0.95 ■
capital expenditures jumped 30%. Twenty of the 27 cities
increased their capital expenditures over 1996 levels, half of them
by 50% or more. Expenditures were primarily for street mainte
0.85
1988
nance and repair, recreational facilities and sewer system repairs.
Economic growth has increased sales tax and other revenues,
1989
1990
1991
1992
I CAPITAL EXPENDITURE GROWTH
enabling cities to start projects previously deferred for lack offunds.
Source: California State Controller's Reports
@
1993
1994
1995.
1996
1997
I POPULATION & EMPLOYMENT GROWTH
With demand rapidly escalating, restrictions on and industrial developrnent, generate the bulk
supply have also exerted enormous inflationary ofthe revenue that fills city coffers. A1999 sur
"By allowing
fiscal policy to
pressure on housing markets. Prohibitions on vey by the Public Policy Institute of California
developing land that would otherwise be suit substantiated the effect ofthis logic, noting that
able for housing, such as San Jose's Urban the state's city managers placed far more value
Growth Boundary, may serve legitimate envi on generating new sales tax revenue than filhng
drive land use
choices,city
officials niake
decisions that
ronmental objectives. However,by limiting land the need for affordable housing.**
availability,,they also contribute to the rise of
By allowing fiscal policy to drive land use
choices, city officials make decisions that ap
Neighborhood opposition to new housing devel pear financially prudent, but cause lasting dam
opment is another key factor in Silicon Valley's age to the community. Some state leaders now
housing shortage.Though empirical evidence to recognize the dangers of"fiscalizing" land use,
support their worries fails to exist, homeowner but have had difficulty overcoming resistance
concem that the introduction ofafibrdable hous-~ by local officials to change.
appear
housing pri^s.*-^^
financially
prudent, but
cause lasting
damage to the
community."
ing in their neighborhoods will diminish prop
erty values has bolstered opposition to needed
development. This"not in my backyard"senti
ment has been a major obstacle to the expan
sion of affordable housing in San Jose.
1
|P
li
TABLE 2: Ratio of jobs to housing
PaloAito
Additionally, California's public finance system
works to discourage new housing development
by denying cities the tax revenues necessary to
pay for the basic services new residents require.
For example,the total amount ofproperty taxes
received by the City of San Jose for FY 99-00
W-'
R
Santa Clara Sunnyvale San Jose
Population (i)
61,505
Number of jobs, 2000(2) 106,690
Housing units(3)
26,097
102,895
135,370
39,326
133,215
131,140
54,437
923,591
410,990
287,506
i
fc
Jobs to housing ratio
3.4
2.4
1.4
&
4.1
1 California Department of Rnance projections: January, 2001.
2Association of Bay Area Governments(ABAG)job projections.
3 California Department of Finance projections; January, 2001.
Si:.
1
totaled $66,684,000.These revenues constituted
less than halfofthe police department's operat
ing budget alone $175,092,408. Given these
limitations,it's little surprise that municipahties
often regard new housing less as an asset than
as a source ofnew expense. On the other hand,
sales taxes, which are generated through retail
* The UGB encourages "smart^^rowth" strategies to address the jobshousing imbalance and related stress on our infrastructure. One such
strategy is to build housing along transit corridors.
M
** Despite the fiscal disincentives for housing construction, it is
important to note that different citiesi in the region vary significantly in
the extent to which they allow these pressures to.limit their commit
ment to the production of affordable housing.As Table 2 demonstrates,
San Jose stands out as the city with the greatest sense of regional
responsibility towards responding to the vaile/s housing needs. Not
only is San Jose's jobs/housing ratio much lower than those of other
cifies, it also produces a higher percentage of subsidized units. Thus,
San Jose does less to cause housing price inflation and does more to
mitigate the effects of high housing costs than its neighboring cities.
Silicon Vallcy^s
Housing Crisis
WORKING PARTNERSHIPS USA 1
ii
tl
k
4 PROPOSED SOLUTIONS TO LOW INCOME HOUSING
AFFORDABILITY
The worsening ofthe affordable housing shortage in the case oflow-income households
directly stems from 2 reasons; a drop in the number of unsubsidized low-cost rental housing
units in the private market and a growing number oflow-income renter households. The
latter occurred because disproportionately morejobs that were created in certain areas in
California were low-income jobs. The first part ofthis chapter(Section 4.1)presents Steps
that State policy makers can take to insure that the solution to middle-income hosing
affordability does not make low-income affordability worse. The second part ofthis chapter
(Section 4.2) presents the case study ofthe Housing Trust of Santa Clara County(HTSCC).
4.1 Steps That State Policy Makers and Housing Personnel Can Take
Density: Raising the development capacity of existing sites increases the overall
potential supply of housing by making more intensive use ofavailable land. Higher
densities can improve the affordability of housing because per unit land costs are lower and
construction can be performed more efficiently. Density increases near employment centers
and transit nodes can also help to alleviate automobile congestion. Many counties have
incorporated these "Smart Growth" policies in their consolidated plans. Communities can
adopt zoning and/or subdivision regulations to allow a "density bonus" above that which is
normally permitted on the site in exchange for the provision ofsome below market rate
housing units. Local authorities could enhance compatibility between the new higher
density development and existing development and focus public debate on the actual
appearance and effect of new housing rather than arbitrary density numbers.
44
Inclusionary Zoning: Inclusionary zoning stipulates a minimum percentage oflow ■
and moderate-income housing in new developments. Inclusionary programs are based on
mandatory requirements or on development incentives, such as density bonuses. The
establishment ofinclusionary zoning does not depend on State or Federal subsidies or the
direct involvement of outside agencies. It is a local requirement under local control. If a
jurisdiction is attempting to alleviate the acute housing short^e for low- to moderateincome households through zoning,inclusionary zoning is a good choice.
Office/Housing Linkage Programs: Some commimities with a housing crisis haye
found it necessary to require new industrial, commercial,and office development to aid in
the development ofhousing.In a linkage program, project approval is conditional with the
applicant either directly providing market rate and/or affordable housing, or paying in-lieu
.n
fees for housing purposes. Linkage programs can be mandatory in which all new nonresidential development must devote, or pay in-lieu fees, a percentage oftheir development
to affordable housing. Cities ejqperiencing large-scale employment growth can use linkage
programs to mitigate the impact Of new jobs on the local housing market or community as a
whole. Some housing authorities doubt the merits ofthis approach;they favor the "carrot"
approach rather than a "stick" approach.^"
Rezoning Vacant Landfor Residential Use: Many areas in Southern Califomia and
the Bay Area have a shortage ofland designated for residential use and a surplus ofland set
aside for commercial, office, and industrial use. Politically, changing the general plan and
rezoning surplus industrial and/or commercial land can be an effective way to make a
significant amoxmt ofland available for housing. In addition,imderutilized a^cultural land
and surplus land owned by public entities can be rezoned for residential use. Many
45
communities own land: unused school sites, surplus public properties, and even the air rights
of parking lots. All have the potential to house a new residential development.
Mixed Use: In contrast to conventional single use development, mixed use
development of a tract ofland or structure combines residential uses with one or more other
uses such aS office, retail, public, entertainment, or even manufacturing. Mixing uses often
requires changes to the zoning ordinance or planned unit development regulations. To
encoiuage housing, a community can allow residential uses in cormhercial areas and other
non-residential zones,especially downtowns,thereby creating multi-use ^eas.
Infill: Infill development occurs on sites that have been bypassed by previous
development. Utilities and other infiastructure typically already serve infill sites; this can
reduce the fi:ont-end costs of development. These sites are often well suited to multiple
family projects, as more units offset higher land costs and make housing more affordable
Landbanking: The development of affordable housing depends, to a large degree on
thOjavailability ofa site. Landbanking is a technique whereby a city or county,in
anticipation offuture development,acquires vacant land or underutilized sites at a lower
cost or before it comes on die market State law gives local governments, and non-profits,
,
^
■
■
priority in the purchase of surplus land. When resold or leased to a developer, restrictions for
the development ofaffordable housing can apply.
Growth Control Exemptions: Many jurisdictions have enacted ordinances to control
their growth. They may do this by limiting the number ofbuilding permits that can be issued
each year, limitrng growth in specific areas or corridors and encouraging it in o&ers, or
restricting major development until certain infrastructure performance standards are being
achieved. Although removing these growth limits may be the most effective way to improve
46
overall affordability, the growth control criteria by which projects are permitted can be
designed in such a way as to encourage certain types of affordable housing.
Adaptive Reuse: The conversion ofoutmoded buildings such as old school buildings,
train stations, warehouses,factories, and other industrial buildings, can provide the
opportunity for new residential uses within a community.''
Self-Help Housing: Self-help, or sweat equity, housing enables potential
homeowners to build up credit for a down payment on a home by contributing their labor to
the construction or renovation. California Housing Finance Agency(CHFA)finances self-
help housing by providing below market bond financing for mor^ages on homes in urban
areas. The Farmers Home Administration Mutual Self-Help Housing program has sponsored
many rural projects.
Factory-Built Housing: Factory-built houses are the least expensive to construct.
Once built, these prefabricated houses blend with custom housing. Manufactured housing
are factory built mobhe homes built to the HUD mobile home standards.
Mobile Home Park Preservation: The preservation of mobile home parks allows a
community to protect a valuable source ofusually irreplaceable affordable housing.
Senior Housing: Typical techniques to meet the housing needs ofthe elderly include:
smaller attached or detached housing for independent living (both market rate and
affordable); second units; homesharing for those who wish to stay in their homes; agerestricted, below market rate rental projects; congregate care facilities; lifecare facilities
(similar to congregate care, but where occupants own their own condominium or
cooperative unit); residential care homes licensed by the State; and skilled nursing homes.
47
Single Room Occupancy Hotel: Formerly homeless people often find SROs an
affordable entry point into the housing market. The availability oflow-cost SROs can also
protect some people from becoming homeless.
Streamlining Procedures: Recognizing that administrative delay adds to
development costs,jurisdictions have reviewed and streamlined their land use and
development procedures. The intent is to simplify and coordinate the means ofobtaining
rezonings, use permits, subdivisions, approval ofdesign and engineering plans, and building
permits.
PATH:The energy costs of housing are among the most controllable factors
affecting housing affbrdability. High utility or energy costs could be the final factor that
forces a family into homelessness. (Especially considering the current "energy crisis that
California faces.) The Partnership for Advancing Technology in Housing(PATH),reduces
the cost ofbuilding and operating homes by helping to speed the adoption of new
technologies in building as well as in saving energy. PATH homes lead to a 20%
reduction in the purchase price ofa home.
Effective Use ofLocal Resourcesfor Affordable Housing: Private sources of
financing and funding are available, and growing. Foundations, banks, savings & loans, and
private investors have become much more active in assisting in the development of
affordable housing. California voters have passed several bond measures to fimd
rehabilitation and construction ofa significant amount of affordable housing.
Municipal bonds put the power ofpublic finance to work for affordable housing. Because
the holders of municipal bonds pay no taxes on the interest they receive, local bonds have
48
lower interest rates than conventional financing. Local governments can also apply other .
financing tools to assist in residential development
State Funding has been given a boost by the passage oftwo bond measures to make
available $450 million statewide for new construction and rehabilitation ofaffordable
housing. Private Resources are available fi-om banks and savings and loans as well as
private investors. Commitments to the community.Federal regulations, and the tax code
have helped create several financing and subsidy sources for the development of affordable
housing.
Package and Advertise Information on HomeBuyer Assistance and Low Cost
Rentals: Lack of knowledge of all programs and resources is a final barrier to home
ownership. Housing Authorities should have homeownership fairs, seminars and trainings
have greatly assisted would be purchasers in sifting through the glut ofdata and claims made
by lenders.^^
Expand City-County Partnerships: Many cities have established redevelopment
areas. Under State law,20% of gross redevelopment revenues must be set aside into a low-
income housing fimd(LIHF)and be spent on eligible housing activities. Many cities have
substantial fimds that have not yet been allocated or encumbered. If counties enter into
partnerships with such cities to encourage rehabilitation, new construction or
homeownership within an incoiporated city, the county should expect to leverage that city's
resources in the following ways.
■ Coimties shoiild undertake efforts to identify all surplus counly-ovmed property with the
intention ofselling or leasing the land for affordable housing projects, where appropriate
and feasible.
49
■ Encourage development of affordable housing on parcels located in the unincorporated
areas ofthe county w^iere land may be cheaper.
■ Donate, selling or leasing land at a significant discount \^en the land is being used for
development of affordable housing
The
Affordable Housing Strategy, 1999, mentions several guiding principles
for Orange County. Many ofthese principles have a general appeal that could be used as
general guidelines
■
Given limited resources, do not compete with the private sector.
■
Coordinate county efforts in support of city efforts.
■
Stimulate activities that would otherwise not occur.
■ Help those who are attempting to help themselves
■
Help with a hand-up, not with a handout.
■ Tackle problems affecting communities, notjust individuals.
■ Focus on lending, not granting.
■ Focus on leveraging other resources, not duplicating them.
■ Focus on roles that utilize the strengths ofother institutions such as lenders' expertise.
■ Focus on efSciency,for example, use Section 8 operating reserves more efficiently.
■ Reducing program administration costs by linking programs and designating one lead
agency.
■ Keep approaches as simple as possible and fill in gaps.
■ Maximize the efficiency ofhousing authority by having outside firms handle routine
tasks such as origiimtion, servicing, monitoring, and on-going marketing.
50
Reverse neighborhood decline in targeted unincoiporated islands in a coordinated effort
to encourage their annexation.
Provide 3 options for loan subsidy approaches to owners who are willing to maintain
their rents at affordable levels for 10 years. This wiU reverse neighborhood decline
Option 1: Offer interest wnte-down grants through existing financial institutions
for qualifying rental properties, and market the program jointly with participating
lenders. HUD has studied rental programs around the country, and found thaf
this strategy can lead to a high level ofefficiency and leverage. The loan would
be due in fiill, possibly with a penalty or higher interest rate, ifrents rise above
affordable levels. Market the low interest loansjointly with lenders.
Option 2: The Coimty provides direct second loans to qualifying apartment
builders. The second loan would be on a residual receipts basis and forgivable, a
tenth at a time,over ten years. Rents would be capped at affordable levels for
these 10 years. The county would monitor performance in al these cases.
Option 3: Set up a loss reserve program. The housing authority would deposit a
sum with lenders to be held as a reserve for losses on a second mortgage.
Lenders would make loans for needed rehabilitation to qualifying apartment
owners. Rents would be limited for 10 years at affordable levels with penalties
for non-compliance HOME and redevelopment funds can be used for rental
rehabilitation efforts.
4.2 Case Study—Housing Trust of Santa Clara County
Santa Clara County-the heart ofthe booming Silicon Valley-faces a severe crisis
ofaffordable housing. In Silicon Valley, you are at the poverty level if you are malring
51
Facts and Figures
Important Information About California
New Single Family Units
thousands
of homes
i of units
Califomia
permnted
New Multi-Family Units
1 thousands
California
: permitted
180
1980-2000
160
—
150
■ai
140
120
125
100
s.
10G
80
' C. i
60
40
20
19^ 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
.
—
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Prepared by the Califonv'a Economic ForecastProject
Preparedby the Califomia Economic Forecast Project
Affbrdability Index
(penxn
ofhMseholcis
|i||
A
0
Ratio of Caiiibiria Median Home Selling Price
to U.S. Median Home Seiiing Price
lab'o
Califomia
1990-2000
SL2
n
»
December 1988-December 2000 '
*
ZO
-
|i
m
f ^
-
1.6
r
1990
1991
1992
1.8
1
r "
r-
»
i
1.4
I
m
*
1993
1.2
1994
1995
1996
1997
1998
1999
Deo-90
2000
Source; Califomia Association cIREALTORSS
600
Deo96
Deo98
DeoOO
Median Hcne SeKng Price
tteusands
Santa data, San Francisco, & Sactamerto Counties
cfdollara
Doo.94
Preparedby the California EconomicForecastProject
Median Hons Selling Price
thousands
000-92
Los Angeles Orange, and San Diega OouiSes
efdoilara
330
December 1992' December 2000
SOC
290
400
250
m 300
210
December 1992-December 2000
Orange
\
San Francisco Bay
^200
i
170
Sacrame
San Diego
IOC
Deo.92
18
Los Angeles
130
Deo93
Deo-94
Dec>95
Deo>96
Deo97
Dec-9a
Deo-99
Dec-00
Deo-92
Deo-93
Deo-94
Deo-95
Dec-96
Deo-97
Dec-S8
Dec-99
Deo^JO
Kathleen Connell, Califomia State Controller
rehabilitation programs, to a
housing policy focused on state
and local government initiatives.
Indeed, even though the two
Affordable
Housing and
major sources of affordable
California have organized to
advocate for more housing, it is
striking how little in the way of
policy and initiatives have
emerged from local governments.
housing financing, the use of This is all the more alarming
since, as we will see, it is local
bonds and the low-income governments that have by far
housing tax credit program,(both the greatest ability to influence
of which were created in the the development of affordable
1980's) involve
federal housing in California.
subsidies, both programs are
Rhetoric aside, local
administered and carried out at government Can really influence
the state and local level.
the development of affordable
Local
tax-exempt mortgage revenue
Government
Bill Witte
Related Companies
It is local governments
Beginning with the New
that have by far the Deal and running through major
The recent econoihic boom housing in only three meaningful
greatest ability to federal legislation in 1949,1968, has highlighted and in fact ways. First and foremost, it can
influence the
and 1974, the federal
government
was largely
development of
responsible
for
the
delivery of
affordable housing in
affordable housing in this
California.
country. The process,limited as
it was, was often heavily
politicized and couched in terms
ofother public policy objectives,
such as job creation or urban
renewal. The 1980's marked a
transition from,this dominant
federal role, which all but
ended with the demise of the
Section 8 new construction and
exacerbated the housing needs
of low- and moderate-income
people, particularly in high
growth areas in California. It
would not be mere hyperbole to
characterize the shortage of
affordable housing in California
as a brewing crisis. While the
encourage (or discourage)
developmentthrough local-land
use policies. Regardless of the
number and funding of subsidy
programs, little affordable
housing will occur unless there
is a supply ofland that is zoned
to accommodate it. Second, it
state government has responded
can designate surplus, publicly
with, among other things, the
first housing programs from
owned sites for affordable
housing.(The amount ofsurplus
General Fimds in decades, and property in many communities is
even business groups in the. often far greater than imagined.)
Bay Area and parts ofSouthern Third,it can utilize the financing
Figure 5
Housing Affordability Varies Widely Across
California
70 --
60 --
•54"
.47_
50 --
40
'33'
30
'23'
20 -- -16
-17
17---.
"14-
10
4®'
^
4
Source: California Association of Reallors, Percentage of households that can afford topurchase the median priced, detachedsingle
family home.
Controller's Quarterly ■
Spring 2001
programs that it does control,
preferably in combination with
San Jose, Mayor Ron Gorrzalez
has just announced a
housing in general and
affordable housing in particular
land use and regulatory policies
that help encourage such
development.
comprehensive housing policy
someone else's problem, or one
designed to funnel everincreasing dollars into affordable
housing and to encourage
that should be left to the free
Bay Area cities have often
been among the most proactive
in moving to address the
housing problem, which is not
surprising since the problem is
market. In many communities
throughout Los Angeles and
Orange Counties, for example,
significant new housing in the
City's still developing Coyote there is a head-in-the-sand
Valley.
mentality that has resulted in the
There are glimmers of highest ■ incidence
of
most acute there. Still, it is activity even in areas that overcrowding and the greatest
instructive to consider what can historically have shied away "affordability gap" (that is, the
be accomplished. In San from public sector initiatives. gap between household income
Francisco,wherefully 80% ofthe Cities throughout San Diego and market rents/prices) in the
city is already built out, the city County, for example, have country.
has aggressively moved to implemented ihclusionary
The point is not to direct
rezone
underused
non- housing policies in growth areas blame— there's plenty ofthat to
residential land to residential and master-planned commun
go around—^but to increase the
use, which has fueled a ities, ensuring that at least a visibility ofhousing as a political
downtown housing boom. In percentage of all new housing issue, and to build on the
addition, its Redevelopment development will serve the low- increasing number ofsuccessful
Agency allocates 40-50% of and moderate-income families local initiatives. The availability
its pool of tax increment funds that provide a significant chunk of decent, affordable housing is
to affordable housing, over ofthe local labor force,but who central to successful economic
twice the percentage required by without such a policy face long development, neighborhood
law. In Oakland, Mayor Jerry commutes to work.
revitalization, transportation,
Brown has taken dramatic steps
The above examples and a host of other public
to encourage the development unfortunately remain the policies.p
of housing in the City's long exceptions to the rule that most
neglected downtown. In local governments consider
Housiig Affcrdafcgayin CaGtonia is Vfel Bekwv the NaUcnal Average
Kathleen Connell,California State Controller
In San Franclsco...the
city has aggressively
moved to rezone under
used nonresidential
land to residential use,
which has fueled a
downtown housing
boom.
base salary ofa police officer in
Moreover, recruiting officers to
San Jose is $51,272; the base
fill vacated positions has proven
extremely challengiiig in a fertile
economy abimdant with privatesector jobs. The Los Angeles
Police Department currently
faces a shortage ofroughly 1,000
officers from their optimally full
staffof 10,176. Despite a costly
income of a firefighter in the
same region is $32,000. A few
simple mathematical calculations
add up to the unhappy
conclusion that public safety
officers simply cannot afford to
live in the communities they
serve. Although Santa Clara nationwide
recruitment
County encompasses one of campaign, only a few qualified
Housing for
Public Safety
By
Assemblywoman
Rebecca Cohn
(D-Saratoga)
California's most extreme
candidates were found and even
examples of today's record fewerjoined. Manythat declined
Public safety officers
A thriving community housing prices, the salaries of the position cited the cost of
simpiy cannot afford depends on housing. In police officers and firefighters living as one of the primary
to live in the
California, particularly in the
communities they
Silicon Valley, skyrocketing
serve.
throughout the state are
inadequate to buy homes in
higher-priced urban areas.
housing prices and insufficient
housing production are
The result is that the men
threatening the livelihood ofour and women who protect our
communities. The resulting communities fi-om crime and
problems are discussed danger have two options: one is
frequently -urban sprawl, to leave their departments for a
outrageous commute times, suburban, rural, or even out-oftrafSc congestion,limited family state position; the other is to
time for working parents - the commute several hours a day
deterrents from accepting
employment.
When officers undertake
long commutes the cost is both
to the communities they serve
from out-of-town residences.
and to their own quality oflife.
Policing and firefighting are both
highly stressful, dangerousjobs.
Adding several hours of
commuting to an already
demanding work schedule
compromises our safety. It is not
consequence less frequently
With
choice, our
in our best interests to have our
mentioned, but of critical
communities and our public
safety officers lose.
public safely officers physically
and mentally fatigued before
they even get to work.
Perhaps most importantly,
list is
interminable.
A
importance, is the toll our
housing crisis takes on public
safety.
The average price ofa home
in Santa Clara County is now an
astounding $560,550. The annual
either
When officers leave their
departments, cities lose the
experienced police officers and
firefighters that know their
communities
intimately.
om cities lose the benefits of
having peace officers and
firefighters as residing members
Figure 6
Rents Outpace Household Incomes
il
r- —
r-TT-
- - — ..... ....... ...TJ- —
mm
I**
Rent - 1.A
■
Rent-SF
~n
Median Renter
Median Renter
Income
witti Cliildren
Poor Renters
Poor Renters with
Children
Source: California Budgel ProjectAnalysis of the current population survey.
Poor households are those at the 20th percenhle.
Controller's Quarterly ■
Spring 2001
of the communities they serve.
Having police officers and
firefighters actually living in
neighborhoods
is
an
immeasurable contribution to
public safety. The very presence
of officers as neighbors and
stakeholders in the communities
where ourfamilies live, work and
play make neighborhoods more
attractive to residents, less
attractive to criminals and safer
in general.
This is the rationale behind
the Federal Housing and Urban
Development Department's
Officer Next Door Program,
which provides a 50% discount
on homes for police officers in
2000, which originally included
several mortgage assistance
programs for public safety
officers, passed last session
with no provision for housing aid
to police officers and firefighters.
It may therefore be up to
California to assume leadership
this year in helping our public
safety officers in this time of
housing need.
Until we are able to provide
affordably adequate housing in
the communities where people
work, or until we are able to
compensate public safely officers
in such a way that they can
afford to reside in these
communities, we must do
economically distressed areas
classified by HUD as
the
revitali2ation areas. Several cities
between base income and
everything possible to mitigate
untenable
difference
and Long Beach will act as a
recruitment incentive for these
departments and will help
officers
to
move
into
communities previously out of
their price range.
The overall housing
shortage in California needs to
be addressed systematically.
Our state's fiscal system, which
forces local governments to rely
on sales taxes rather than
property taxes, provides strong
disincentive for community
development and must be
reformed. Local governments
must adopt zoning and land-use
policies that accommodate
housing for all income levels and
densities. More money needs
to be invested in housing
development if we are to house
nationwide including Los
inflated housing costs. For this
all of our state's citizens
Angeles,CA,Portland,OR,Fort
Wayne, INj and Columbia, SO
have also implemented home
reason. State Controller Kathleen
adequately and safely. However,
for the present shortterm,we can
and should provide assistance
loan programs to encourage
up to $7,500 to help police
officers and firefighters purchase
to public safety officers to
homes in the cities where they
work. This loan will be forgiven
if the officer stays with the
in part due to such a program.
municipal department for five
Unforttmately, Congress' years. This program, to be
American Homeownership and piloted in Los Angeles, San
Economic Opportunity Act of Francisco, San Diego, San Jose
neighborhoods. We owe this not
only to these valiant men and
police officers to live in the
communities they serve. In
Columbia alone,crime fell sixteen
percent between 1991 and 1996,
Coimell and I have introduced
AB 905,which will provide loans
become residents of our own
women for the service they
provide our communities, but
also to our own families and
neighborhood safety.
Renters are Hardest Hit
Affordabillty in terms of rent Is defined as paying less than 30% of income for shelter. 43%
of all Caiifornia households are renters, and more than a quarter spend more than half of
their income on rent.
47% of California renter households pay over 30% of their incomes for housing.
In 1999, 45% of California renters were unable to afford the fair market rent on a twobedroom apartment.
In 1997, the number of low income renter households in the state's metropolitan areas
exceeded low cost rental units by 2.1-to-l, a gap of 684,000 units.
In the Los Angeles Metropolitan area, rent has risen 15%, while the median income of
renters rose 9.6%.
Source: California Budget Project
Kathleen Connell,California State Controller.
We must do everything
possible to mitigate
the untenable
difference between
base income and
inflated housing costs.
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING AND OTHER REGIONAL ISSUES
prepared by:
Susan Sllveira
Springboard Consulting
Housing and Other Regional Issues
Statewide Impact
California's housing crisis has serious implications for the femilies affected, for the
communities in which they live and for the overall well being ofthe state's economy.
Many ofthe connections between housing and other issues are frequently overlooked, but
they include: ^
The homing crisis threatens to undemune the continued growth ofCalifornia's
economy. The housing crisis in Silicon Valley, the engine of much ofthe state's
economic growth, has reached epic proportions. Many businesses report problems
attracting employees from other parts ofthe state or the country because ofthe
high cost ofhousing in that community. In many metropolitan areas, workers who
provide basic services - teachers, firefighters, secretaries - cannot afford to live in
the communities where they work.
High homing costs have impacts at the community level Rising costs are
forcing many low- income femilies from communities where they have lived for
decades. In the San Francisco Bay Area, gentrification oftraditionally low and
working class neighborhoods is running rampant. Housing pressures are so
intense that long-time residents ofneighborhoods, such as San Francisco's
Mission District and East Palo Alto, are being forced to move out ofthe
neighborhoods that they have called home for generations, reducing both social
and economic diversity in these areas.
The ability to obtain higher rents on the open market is leading many landlords to
opt out offederal housing programs. Landlords are pre-paying mortgages and
refijsing to renew contracts to maintain affordability, eliminating what is
frequently the only affordable rental stock, making those communities the
exclusive enclaves ofhigher income households.
Intense homing marketpressures areputting pressure on the environment The
problems ofunchecked urban sprawl are by now familiar to most policymakers:
grid locked freeways, longer commute times for workers, greater air pollution,
and loss ofopen space. But one major contributing factor to urban sprawl is the
search for affordable housing. Families seeking affordable housing are being
forced ferther from the metropolitan core to find it. In the Bay Area,for example,
the number ofvehicle miles driven increased 18.6 percent between 1990 and
2000. During the same period, population increased at two-thirds the pace(13.3
percent). Distant suburbs are often the only option for yoimg families seeking to
buy their first home. Yet, affordability comes at a cost: reduced time to devote to
family and community as a result oflengthy commutes and the loss ofprime
agricultural land to development.
The homing crisis exacts a great toll on the health and well being offamilies.
Studies indicate that children who live in imaffordable or substandard housing are
more likely than adequately housed children to suffer a variety of health
'Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
problems. Without affordable housing, children often lack adequate nutrition and
do not arrive at school ready to leam. Also,families with high rent burdens move
more frequently than those families with more affordable rents - res^llting in
frequent school changes for their children. Taken together, it is not surprising to
leam that children with poor housing conditions perform less well in school than
those with more affordable and stable housing.
The lack ofaffordable homing limits the ability ofthe working poor and those
on welfare to move up the economic ladder. Housing plays a critical role in
helping welfare recipients make the transition to work. The high cost ofhousing
in the parts ofthe state where jobs are most plentiful may discourage welfare
recipients from relocating from areas where job opportunities are more limited,
but housing less costly. Surveys of welfare recipients indicate that housing
problems pose substantial barriers to findiug and retaining employment. One
reason for this may be that after paying for housing, welfare recipients have little
extra money left over to pay for child care and other expenses associated with
work.
The homing crisis contributes to the continuing problem ofhomelessness. The
lack ofaffordable housing contributes to the ongoing tragedy ofhomelessness
throughout the state. While many factors, including substance abuse, mental
illness, poor health status, and disabilities, can result in poverty and cause
homelessness, affordable housing is at the heart of what is needed to both prevent
individuals and femilies from becoming homeless and address the problems of
those who are already living in shelters or on the streets. ^
Santa Clara County Focus
Housing/Transportation
Thirty-seven percent ofnew housing units and 32% ofnew jobs were located near transit
in 2000.^ In 1999,57% ofnew housing units and 35% ofnew jobs were located near
transit."^
Per capita transit ridership mcreased for the first time in three years, because ofincreased
ridership on Caltrain and light rail.^
The number of workers commuting into Santa Clara County from surrounding covmties
increased from 144,000 in 1990 to 212,000 in 2000-a 47% increase. The commuters'
share oftotal employment in Santa Clara County increased from 16% in 1990 to 20% in
2000. ^
^ Locked Out: California's Affordable Housing Crisis, California Budget Project Feb. 26,2001
^ Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2000 Index of Silicon Valley
^ Joint Venture's 2001 Index ofSilicon Valley
®Ibid.
Thirty percent oftotal freeway miles received the worst possible congestion rating, up
from 27% in 19987 The limited number ofhomes near job centers in Silicon Valley is
the primary cause ofcongestion in the corridors leading to and from Silicon Valley7 In
1995 there were 41,400 jobs in Silicon Valley located within Va mile of Caltrain or Light
rail, 3.8% ofthe total number ofjobs in Silicon Valley. It is projected that 60,400 jobs,
4% ofthe total will be located near transit centers in 2010. In 1995 there were 9,600
households located within % mile of Caltrain or light rail, 1.2% ofthe total number of
households in Silicon Valley. It is projected that 14,100 households, 1.6% ofthe total,
will be located within % mile oftransit centers by the year 2010.®
The lack of affordable housing forces 133,000 Silicon Valley workers to live outside
Santa Clara County.'''
About 78% ofthe coimty's workforce lives vidthin Santa Clara County. This means that
22 percent ofjobs in the county are filled with workers commuting from other counties.
This situation is exacerbated by the continued high growth in thejob market and the high
cost ofhousing. With the median price ofa single-family home at $547,000 in July
2000, available affordable housmg for Santa Clara County workers is diminishing.
Currently, the number ofemployees living outside ofSanta Clara County is about
237,000. By 2020, nearly 50,000 more people will be commuting to the coimty for
jobs."
Housing/Education
More tlwn 13% ofK-12 teachers in Silicon Valley are not fully certified.
Fiscalization ofLand Use
Revenues for Silicon Valley cities are catching up with population and employment
growth,though revenue sources have shifted away from sales and property tax.'^
Housing/Jobs
Silicon Valley employment grew an estimated 3% in 2000,compared to an average of
4.6% for the five prior years.''' It is estimated that 50,000 ofthese new jobs were filled
by new commuters into Silicon Valley and it is expected that these numbers will climb.'^
Silicon Valley employment grew an estimated 3% in 2000, compared to an average of
4.6% for the five prior years.
^ Joint Venture's 2001 Index of Silicon Valley
^ Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
® Silicon Valley Projections 2000, Silicon Valley Manu&cturing Groupn
Everyone's Valley, Working Partnerships USA
"Valley Transportation Plan 2020, VTA,Dec. 2000
Ibid.
"Joint Venture's 2001 Index ofSilicon Valley
Joint Venture 2001 Index of Silicon Valley
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Ibid.
Since 1992,jobs have grown four times faster than housing. To keep pace with job
growth,the region would have to build an additional 160,000 units.'' Other estimates
indicate that Silicon Valley will need between 112,039 to 146,366 additional homes
between 2000 and 2020.' The San Jose/Milpitas sub-region will generate 44-50 percent
oftotal housing demand,followed by 16-28 percent in northwest Santa Clara County,
and 13-15 percent in southern Alameda County. Southern Santa Clara County, southern
San Mateo Covmty, and southwest Santa Clara County account for approximately 18
percent offiiture housing demand.'^
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s."' ABAG reports for 1995-2000 an average countywide ratio ofnew jobs to new
housing units of6 to 1, with the five highest being in Santa Claraj^Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
countywide ratio ofnew jobs to new housing iinits of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara, Palo Alto and Mountain View.^'
More than 70 percent of Silicon Valley's total employment growth fi-om 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
Overall employment in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000 jobs, including
replacement for the 22,000jobs the region is estimated to have lost between 1990 and
1995. Over one-halfofalljobs added in the region firom 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in Silicon Valley indicate that the incredible job growth currently being experienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
more between 2010 and 2020, down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
The number ofpublicly traded fast-growth companies dropped from 86 in 1999 to 66 in
2000.^"
"Joint Venture 2001 Index of Silicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
ABAG Projections 2000
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
^ Building Sustainable Communities: Housing Solutions for Silicon Valley.Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Joint Venture's 2001 Index of Silicon Valley
4
For the third year. Software added the most new jobs.
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo County produced 0.7 jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^®
Over the next 20 years(2000-2020) between 66 and 72 percent ofhousing demand will
be in San Jose/Milpitas and northwest Santa Clara County, the same areas projected to
capture approximately 67 percent of Silicon Valley's total new job growth.^^
Housing/Population Growth
ABAG population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow down. Overall, the Valley's population is
projected to increase by about 11 percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010, and 3.6 percent growth between 2010-2020. The cities
expected to experience the most dramatic population increases between 2000 and 2020
are Morgan Hill(30 percent) and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda Covmty.^®
HousingAVages
Real per capita income, a measure of wealth creation, increased 6% in 2000, similar to
199929
Average wages in industry clusters continued sharp ascent with Software reaching
$125,000 and Semiconductors $117,000.^"
Venture capital investment more than doubled in 2000 to $ 17 billion.^^
Silicon VaUey was home to 48 ofthe 500 fastest growing high-tech companies in the
United States m 2000,a decline from 61 in 1999.^^
In 2000,the region's average wage increased 9% in real terms, from $60,800 to $66,400.
This increase compares to a national increase of2% to $36,200.^^
^ Joint Venture's 2001 Index of Silicon Valley
Ibid.
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Ibid.
Ibid.
Ibid.
Ibid.
Ibid.
Average wages for industry clusters increased 20%; wages in other industries increased
1%.^^
A representative household at the bottom 20% of Silicon Valley's income distribution has
less income now than in 1993. A representative household in the bottom 20% earns an
estimated $40,000. In the last two years(1998-99), households at the bottom 20% of
the income distribution saw their income increase slightly, but their 1999 income
remained below 1992 levels.
Incomes for the top earning 20% ofhouseholds rose an estimated 20% in inflation-
adjusted terms since 1993 to $149,000.^^
Forty percent ofalljobs in Silicon Valley are in the following industry clusters:
computers/communications, semiconductors/semiconductor equipment, software,
bioscience, defense/space, innovation services and professional services.
Last year, Silicon Valley generated four times as manyjobs as new housing units. In the
northern part ofSilicon Valley,job growth outpaced housing construction by 16:1
Local Government Investment
Capital investment by local governments in Silicon Valleyjumped 30% between 1996
and 1997(the latest year for which data are available), after having declined or grown
only nominally each year since 1990.'*°
Housing/Energy Costs
In January 2001, 15,000 area Pacific Gas & Electric customers lost their electricity: a 15
percent increase fi:om January oflast year. Electricity costs, which previously accounted
for 7 to 15 percent ofa low-income family's budget now claim between 17 and 45
percent.'**
Lack of Coordinated Strategy
Though the housing crisis touches every community,local leaders have yet to develop a
coordinated regional housing strategy similar to the approaches they have embraced for
combating air pollution, promoting mass transit and other challenges.'*^
Joint Venture's 2001 Index of Silicon Vallw
Ibid.
Joint Venture 2000 Index ofSilicon Valley
Joint Venture's 2001 Index of Silicon Valley
'«Ibid.
Everyone's Valley, Working Partnerships USA
Joint Venture's 2000 Index of Silicon Valley
Everyone's Valley, Working Partnerships USA
■*2 Ihid.
Strategies for Solutions
The Valley Transportation Authority's Livable Community and Pedestrian Program
will provide up to $20 million by 2020 from future federal fimding cycles for projects
that provide safe walking access to jobs, schools, bousing, transit and other destinations.
(With a 20% local match requirement these funds will total $24 million./^
Some relevant strategies for housing development in the Valley Transportation Plan 2020
include
1) use land efiBciently and support concentrated development with strategies
including: land use intensification and reuse, transportation investments that
minimize right of way requirements, and limiting land area dedicated to surface
parking, and
2) support development that e3q)ands housing accessibility relative to transportation
alternatives, proximity to job centers, child care and other essential services, range
ofaffordability, and opportunities for both rental housing and home ownership.''^
VTA already engages in land use activities to further its goals for concentrated
development. Three current efforts consist ofthe following activities:
1) Development Review-review ofproposals to ensure tlmt transportation is
adequately integrated.
2) Pro-Active Congestion Management Program-review ofproposals to ensure that
transportation impacts are minimized
3) Transit-Oriented Development-provides expertise and resources to achieve transitfriendly development.
Valley Transportation Plan 2020 expands VTA's activities in land use with two new
programs:
1) Best Practices for Integrating Transportation and Land Use-a partnership with
member agencies to support the consistent use ofland use strategies.
2) The Land Use/Transportation Investment Strategy-gives a more prominent
place to land use fectors in the planning and programming processes for
transportation projects.'^^
The Bay Area Alliance for Sustainable Development(Bay Area Alliance) is a multistakeholder coalition established in 1997 to develop and implement a sustainability action
plan for the Bay Area. The Bay Area Alliance has embraced the United Nations World
Commission on Environment and Development definition ofsustainable development as
the ability "to meet the needs ofthe present without compromising the ability offuture
generations to meet their own needs."
Everyone's Valley, Working Partnerships USA
^ Valley Transportation Plan 2020, Valley Transportation Authority Dec. 2000
Valley Transportation Plan 2020, Valley Transportation Authority Dec. 2000
The overall goal ofthe Bay Area Alhance is to reach consensus regionwide among a
critical mass ofstakeholder organizations and civic leaders regarding a new shared
vision rooted in common values about how the region can grow in a more sustainable
manner. The overarching strategy is to achieve the regionwide consensus on a new
shared vision through the development and adoption ofa "compact" that can become the
foundation for implementation actions by both the public and private sectors at the local,
regional, state and national levels.
The Bay Area Alliance is committed to fecilitating a regionwide dialogue on how the
region can grow in a more sustainable manner, and to taking actions commensurate with
achieving that goal. In aU activities and deliberations the Bay Area Alliance is employing
e-vision, integrating the essential Three Es in order to achieve and maintain a prosperous
economy, quality environment, and social equity.
Vision
The Bay Area Alliance for Sustainable Development adopted in June 1997 the following
Vision:
"We envision a Bay Area where the natural environment is vibrant, healthy and safe,
where the economy is robust and globally competitive, and where all citizens have
equitable opportunities to share in the benefits ofa quality environment and a prosperous
economy."
The members ofthe Bay Area Alliance for Sustainable Development agree that a
sustainable Bay Area must have the following attributes:
Environmental quality is excellent.
• The Bay Area ecosystemi ~ including the Bay-Delta Estuary, air quality,
wetlands and watersheds, and biodiversity ~ is healthy, vibrant, and productive.
• Open space and agriculture are preserved as a result ofefiScient, compact land use
patterns.
•
Resources are conserved and waste is eliminated.
The economy is prosperous.
• The regional economy is robust, and productivity is high.
• Unemployment rates are low, and poverty levels are decreased.
• Sufficient housing affordable to the workforce is available close to job centers.
• Traffic congestion is greatly reduced. There is a &st-rate public transportation
system including water transit and the percentage ofsingle occupant vehicle trips
significantly declines.
• Economic well-being and quality oflife are high in all neighborhoods.
The diverse segments of the population share the region's economic
prosperity and environmental quality.
• Education performance is greatly improved, especially among the disadvantaged
population.
• Strategic capital investments in priority neighborhoods, in partnership with local
neighborhood leaders, improve the physical and social environment, provide
living-wage jobs, and enhance housing opportunities for neighborhood residents.
• The workforce in all sectors and civic leadership throughout the region reflect the
diversity ofthe population.
• Land-use planning, economic development and the transportation network
minimize disparities among neighborhoods and municipalities.
The sustainable vision is possible, starting now and continuing over the next quarter
century.
Ten Commitments to Action
The members ofthe Bay Area Alliance for Sustainable Development propose the
following framework for bold action. The Ten Commitments are inextricably
interconnected, and they are directly linked to the previous ten challenges. The order of
listing is not intended to imply a priority.
1. Enable a diversified, sustainable and competitive economy to continue to prosper
and provide jobs in order to achieve a high quality oflife for all Bay Area
residents.
2. Accommodate sufficient housing affordable to all income levels within the Bay
Area to match population increases and job generation.
3. Target transportation investment to achieve a world-class comprehensive,
integrated and balanced multi-modal system that supports efficient land use and
decreases dependency on single-occupancy vehicle trips.
4. Preserve and restore the region's natural assets, including San Francisco Bay,
farmland, open space, other habitats, and air and water quality.
5. Use resources efficiently, eliminate pollution and significantly reduce waste.
6. Focus investment to preserve and revitalize neighborhoods.
7. Provide all residents with the opportunity for quality education and lifelong
learning to help them meet their highest aspirations.
8. Promote healthy and safe communities.
9. Implement local government fiscal reforms and revenue sharing.
10. Stimulate civic engagement.
These Ten Commitments to Action form the centerpiece ofthe Draft Compact for a
Sustainable Bay Area. The Draft Compact sets forth an overview statement and specific
actions associated with each ofthe ten commitments.
1. Enable a Diversified, Sustainable and Competitive Economy to Continue to Prosper and
Provide Jobs in order to Achieve a High Quality ofLife for All Bay Area Residents.
The Bay Area Alliance will work to strengthen the regional economy to reduce the
aggregate effect offiiture global, national, state or regional recessions. We will seek to
ensure that all sectors ofthe Bay Area population have the opportunity to participate in
the region's growing economic prosperity.
We commit ourselves to:
• Support and lead collaborative actions to enhance the region's economic strengths
and minimize its weaknesses while ensuring its comparative advantage, protecting
the environment and improving social equity.
• Encourage businesses in environmental technologies, material recycling, energy
efficiency, brownfields reuse and those that employ the disadvantaged.
• Participate in discussions on: growth and sustainability; the nature and quality of
jobs in the region; the relationship ofa living wage and sustainability; and
strategies to promote a living wage without affecting competitive positioiL
• Encourage the location ofjobs near places where workforce housing exists, and
link jobs and housing with convenient, affordable transit service.
• Link employer-based workforce development to the schools, including technical
and vocational schools.
2. Accommodate Sufficient Housing Affordable to All Income Levels within the Bay Area
to Match Population Increases and Job Generation
The Bay Area Alliance will work to protect and expand the supply ofhousing that is
needed by and affordable to all residents. Actions will be taken to promote housing the
most needy, current and fiiture workers ofall income levels in locations near transit,
community services and places ofemployment. We will coordinate our efforts with
regional agencies, local, state and federal governments, employers, community
organizations, developers, non-profits, business associations, economic development
organizations, foundations and lenders.
The Bay Area Alliance supports optimizing the potential for meeting land use needs for
new housing and jobs through increasing average densities with infill, land recycling,
transit villages, development ofclosed military bases, and revitalization ofpoor and older
neighborhoods while avoiding displacement. However, we recognize that even with
optimizing these strategies to achieve more efficient land-use, there might likely need to
be growth in Bay Area urban and suburban communities, but not in identified
10
environmentally sensitive areas, in order to meet the regional housing needs. The Bay
Area Alliance encourages management ofgrowth in a way that uses land efficiently,
reduces automobile dependency, minimizes inter-regional impacts and provides sufficient
housing opportunities to all income levels.
We commit ourselves to:
• Reach out to financial institutions to encourage diverse housing types and mixeduse investments at transit-supportive densities within urban areas, near transit,
which reuse imderutilized or deteriorated areas.
• Work with local community organizations to leam about their needs for housing
and services, including needs ofthe homeless, and encourage community
organizations to participate in planning, advocacy and implementation.
• Advocate in support of mixed-density and mixed-income residential development,
particularly in areas with transit and other services.
• Support efforts to use existing housing stock efficiently, by encomraging second
units, group housing and similar mechanisms.
• Support community-based efforts to retain and e^qiand the supply ofexisting
affordable housing and the adoption of measures to prevent displacement.
• Advocate local government actions, such as amending general plans and zoning
ordinances, and providing incentives, such as permit fast tracking,to encourage
affordable housing development, especially near transit.
• Advocate changes in federal and state legislation to provide incentives for the
development ofresource-efficient, affordable housing near transit, community
services and places ofemployment, and to address barriers such as construction
defect litigation.
• Establish an Affordable Housing Trust Fimd to assist jurisdictions in providing
their feir share ofaffordable housing.
• Support state legislative reform to improve the fair share housing process and
provide financial and other incentives to strengthen localjurisdictions' abilities to
meet their fair share responsibilities.
• Support preservation and conservation ofexisting housing stock such as housing
at closing military bases, single residential occupancy hotels and other affordable
housing.
• Support existing fair housing laws and prohibitions against discrimination in
housing.
11
Focus Investment to Preserve and Revitalize Neighborhoods
The Bay Area Alliance will work to establish a Community Investment Program
("Community Capital Investment Initiative") which supports neighborhood revitalization
efforts while encouraging compact, efficient development patterns. The program, which
is intended to complement existing efforts, will focus job development and training,
community improvements, and social services in neighborhoods e5q)eriencing decline,
including inner cities, older suburbs, and the 46 most inqjoverished neighborhoods in the
Bay Area. The program will provide assistance to community-based entrepreneurs. It will
also encourage employers with high growth opportunity to locate in these areas and use
indigenous vendors for needed services to the extent possible.
We commit ourselves to:
• Recruit community and Bay Area business leaders to participate in developing
and adopting a Community Investment Program("Community Capital Investment
Initiative").
• Support and strengthen the efforts ofeconomic development organizations in the
region that invest in stimulating local entrepreneurship in identified
neighborhoods that are in decline or at risk, while minimizing resident
displacement.
• Seek ways to address the adverse impacts ofgentrification and displacement of
low-and moderate-income residents.
• Work to assure that environmental, housing and infrastructure problems that
discourage investment in these neighborhoods are addressed, including training
and incentives for self-help neighborhood projects.
• Support and strengthen community-based financial institutions to fecilitate
neighborhood revitalization in low-income communities.
• Work with service providers to assure adequate job training and support programs
for local residents.
• Encourage business incubators, and vendors and suppliers to regional growthindustry clusters, to locate in impoverished neighborhoods to complement local
entrepreneurship.
• Support and strengthen the efforts ofemployers who recruit, hire, and train
currently imemployed or Underemployed welfere recipients and the working poor
for jobs with career and mcome growth potential.
• Ensure that new industrial development is compatible with neighborhood and
community needs.
12
Implement Local GJovernment Fiscal Reforms and Revenue Sharii^
To address local government finance and fiscal inequity and uncertainty, which currently
motivates local governments to plan and zone for revenue rather than for balanced
communities, the Bay Area Alliance will advocate changes in legislation and practices at
the state, regional and local level. The goals will be to reduce competition between
jurisdictions for development, reduce economic polarization in the region, and increase
cooperation. We will pay particular attention to improving the fiscal health of
economically distressed inner cities and older suburbs.
We commit ourselves to:
• Advocate changes in state legislation to provide local governments with adequate
and stable tax revenues,
• Establish cooperative, rather than competitive, economic development programs
at the sub-regional and regional levels.
• Encourage local governments to work together to determine how to allocate and
share tax revenues.
• Support expansion and strengthening ofsub-regional and regional cooperative
land-use planning and implementation efforts.
• Support legislative reforms that reduce the fiscalization ofland use.
Appendix A: Sustainable Development Indicators
Following are a set ofbroad indicators, listed by Commitment in the Draft Compact,that
the Bay Area Alliance will use to measure status and gauge progress(or lack thereof
toward sustainability. Where feasible, data will be tracked annually. In addition to these
broad indicators, others will be developed for many ofthe commitments and initiatives
associated with them. The Bay Area Alliance also recognizes that the indicators to be
tracked may change over time. The following are only those indicators to be tracked
initially. As experience is gained, the Bay Area Alliance may choose to add additional
indicators and/or delete some ofthem. This group ofindicators is intended to get the Bay
Area Alliance started on the path oftracking and publicly reporting the status of
sustainability in the region.
This set ofindicators is expected to be widely published by the Bay Area media and will
provide a periodic "report card" to the residents ofthe Bay Area. The Bay Area Alliance
recognizes that some ofthe indicators will require the development ofnew data sets. The
Bay Area Alliance strongly recommends that all applicable agencies, institutions and
jurisdictions implement a dedicated and fimded data collection and analysis effort on a
continuing basis to facilitate and eventually automate the collection, analysis and public
dissemination ofthe sustainable development indicators.
13
1. Enable a Diversified, Sustainable and Competitive Economy to Continue to
Prosper and Provide Jobs in order to Achieve a High Quality of Life for All Bay
Area Residents
Indicators:
a. Annual Gross Regional Product(GRP)/ Annual Genuine Progress Indicator
(GPI).
b. Persons below the poverty line (percentage ofthe population), including data by
ethnicity and gender.
c. Workers with jobs earning less than living-wage (percentage ofthe workforce)
and without benefits, number ofnew living-wage jobs and number ofnew small
businesses, including data by ethnicity and gender.
d. Median per capita income, mean income per capita, per capita income ofthe
lowest and highest quintUes ofincome, and the Gini coefficient.
2. Accommodate Sufficient Housing Affordable to All Income Levels within the Bay
Area to Match Population Increases and Job Generation
Indicators:
a. Housing starts vs. new jobs and population increases(annual and cumulative).
b. Percent oflow- and moderate-incomes spent on housing by renters and
homeowners and on commuting,including data by ethnicity and gender.
c. Housing miits needed injob surplus areas to alleviate severe congestion.
d. Average density ofnew housing and percent oftotal housing within 1/2 mile of
transit nodes.
e. Number ofhomeless, including data by ethnicity and gender.
Inter-Regional Cooperation'*^
An Inter-Regional Partnership(IRP),formed by three councils ofgovernments and local
officials representing five counties-San Joaquin, Stanislaus, Alameda, contra Costa and
Santa Clara-are bridging jiurisdictional boundaries to forge cooperative solutions to
shared problems. They are addressing problems like the geographic separation of
housing and employment, moxmting traffic and air pollution, and growth.
As a result ofthe work ofthe IRP partnership with California legislators, a $5 million
pilot program was adopted by the State Legislature in June 2000. The program will
create Jobs/Housing Opportunity Zones to spur new,inter-regional solutions to common
problems.
^ Silicon Vall^ Projections 2000, Silicon Valley Manufecturing Group
14
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING AND OTHER REGIONAL ISSUES:
SUPPLEMENTAL MATERIALS
GOAL 5: protect nature We meet high standards for improving our air and water quality, protecting and restoring the
natural environment and conserving natural resources.
Air Quality Shows Mixed Improvement
WHY IS THIS IMPORTANT?
DAYS PER YEAR THAT SILICON VALLEY AIR QUALITY
High-quality air is fundamental to the health of people, nature
and our economy. The number of days that Silicon Valley air
EXCEEDS STATE STANDARDS
exceeds ozone and particulate matter standards is an indicator
of air contamination.
Ozone is the main component of smog and vehicles are the
primary source of ozone-creating emissions. The health conse
I
\\
\
quences associated with fine particulate matter(PM10)are
more severe than those asociated with ozone. Fine particulate
matter — including dust, smoke and soot — is generated pri
marily during construction and burning wood.
HOW ARE WE DOING?
Silicon Valley exceeded the state standard for ozone 5 days in 2000,
down from 12 days in 1999. Silicon Valley exceeded the state
standard for particulate matter(PMIO)5 days in 1999, up from 3
days in 1998.(PMIO is sampled only every sixth day, so actual
1990
1991
1992
1993
1994
1996
1997
1998
1999
2000
I PARTICULATES
days over the state standard could be six times the number
shown, or 30 days.) Generally, levels of particulate matter have
1995
Source: Bay Area Air Quality Management District
been decreasing since 1990.
Water Use Increases by 9% in Two Years; Less than 2% Is Recycled
WHY IS THIS IMPORTANT?
Water is a limited resource because water supply is subject to
changes in climate and state and federal regulation. The quantity
and quality of water are essential to residents and to technology
manufacturing industries. Sustainability in the long term requires
that communities, workplaces and agricultural operations efficiently
use and reuse water.
HOW ARE WE DOING?
ACRE-FEET OF WATER USED
400,000
350,000
250,000
Santa Clara County's annual consumption of water increased in
200.000
1999 and 2000. Businesses, cities and households consumed an
estimated 376,000 acre-feet of water, a 9% increase since 1998.
150,000
Water use has increased 30% since 1991, a year noted for its low
100,000
rainfall, extreme water use reduction efforts and an economic
n
300,000
n
50.000
recession.
On a per capita basis, the county increased water use from 207
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
acre-feet per 1,000 residents in 1998 to 216 acre-feet per 1,000
residents, a 4% increase.
Less than 2% of water used is recycled water, up from 1% in
1998. Recycled water is used to irrigate parks and golf courses
and for construction.
Source: Santa Clara Valley Water District
LIVABLE
ENVIRONMENT
GOAL 5: PROTECT NATURE We meet high standards for improving our air and water quality, protecting and restoring the
natural environment and conserving natural resources.
Bad-Air Days Decrease
WHY IS THIS IMPORTANT?
DAYS PER YEAR THAT SILICON VALLEY AIR QUALITY
High-quality air is fundamental to the health of people, nature
EXCEEDS FEDERAL AND STATE OZONE STANDARDS
and our economy.
The number of days Silicon Valley air exceeds ozone standards
is an indicator of air contamination. Ozone is the main component
of smog and is created when volatile organic compounds and
nitrogen oxides are exposed to sunlight. Vehicles are the primary
source of such emissions.
HOW ARE WE DOING?
In 1999, Silicon Valley experienced one bad-air day as measured
against the federal ozone standard, down from three in 1998. The
region exceeded the stricter state standard 12 days, compared to
21 days in 1998.
1989
1990
1991
1992
1993
1994
CALIFORNIA STANDARD
1995
1996
1997
1998
1999
■■ U.S. STANDARD
Source: Bay Area Air Quality Management District
Health of Santa Clara Watershed Declines
WHY IS THIS IMPORTANT?
HEALTH OF SANTA CLARA WATERSHED DECLINES
The health of bays, lakes and rivers depends on the health of
their watershed, the land area from which all water drains, With
out careful planning, development, road construction and agri
culture can adversely affect watershed quality by contributing
sediment from erosion and by releasing contaminants such as
household chemicals, oil and debris from roads, and fertilizer and
pesticide runoff.
There are 14 major watersheds in the Santa Clara Basin, which
covers more than 50% of the land mass of the Silicon Valley region.
HOW ARE WE DOING?
The U.S. Environmental Protection Agency has developed a
composite rating of the Santa Clara Basin's overall watershed
health. Ratings range from one (the best) to six (the worst). In
1999, the rating for the Santa Clara Basin was revised downward
from four to five.
The most serious signs of weakness are high contaminant levels
in fish, water unfit for swimming, loss of wedands and impairment
of drinking water sources before treatment.
High potential for increased urban run-off and continued rapid
population growth make us vulnerable to future declines in
watershed health.
Sources: U.S. Environmental Protection Agency, Silicon Valley Environmental Partnership
GOAL 16: TRANSCENDING BOUNDARIES Local communities and regional authorities coordinate their transportation and land
use planning for the benefit of everyone. City, county and regional plans, when viewed together, add up to a sustainable region.
.1
Permit Streamlining Sets Stage for More Regional Collaboration
WHY IS THIS IMPORTANT?
Collaboration across government jurisdictions in Silicon Valley
requires developing innovative approaches to sharing information,
setting mutually beneficial goals and progressing together. This
indicator tells the story of how local jurisdictions have collaborated
to upgrade, standardize and link new approaches to permitting.
This experience sets the stage for future collaboration in areas
such as land use and infrastructure planning and management.
70%
50%
HOW ARE WE DOING?
A survey of 18 Silicon Valley cities found that 80% continue to use
the standardized Uniform Building Code amendments that were
developed during the mid 1990s jointly by municipal building
officials and the Joint Venture Regulatory Streamlining Council,
and that 45% use the recently developed standardized building
permit form. Sixty percent of local cities are participating directly
or indirectly in the Joint Venture Smart Permit Project with 45%
already offering web-based permitting.(Web-based services include
application submissions, payments, status tracking, information
sharing and citizen response.)
Ninety percent of cities have or are developing a Geographic
Information System for land use and infrastmcture planning,
infrastructure management, public safety and other municipal
services. The next challenge will be to Use the lessons from
the Smart Permit Project to ensure that municipal CIS data
is available for regional analysis and information sharing.
The 18 cities that participated in the survey include 84% of.
the Valley's population.
40%
10%
Use Unifoim
Participate
Use Standardized
Offers Web-Based
Has Geographic
Building Code
in Smart Pennit
Building Pennit
Permitting
Infoimation
Standard
Project
Form
Amendments
Source: Silicon Valley Cities
System
REGIONAL STEWARDSHIP
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY Valley cities, counties and Other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
Government Revenue and Capital Expenditures Catching Up with Economic Growth;
Revenue Sources Shift
GROWTH OF REVENUES AND CAPITAL EXPENDITURES OF SILICON VALLEY'S
CITIES COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
WHY IS THIS IMPORTANT?
To maintain service levels, local government revenues and expen
ditures must keep pace with population and job growth. This
indicator compares growth in the revenues and capital expen
ditures of Silicon Valley cities relative to growth in population
1.50
1.40
=
and employment.
1.30
HOW ARE WE DOING?
Growth in the combined revenue of all cities in Silicon Valley
has been catching up with population and employment growth.
1.20
S
1.10
Adjusted for inflation, total revenue increased 49% from flscal
year 1988 to 1998, from $1.3 billion to $2.0 billion. During this
period, demand for services, as measured by increases in popu
1.00
lation and employment, increased by 58%.
0.90
0.80
1988
1989
1990
1991
1992
I TOTAL REVENUE
1993
1994
1995
1996
1997
1998
CAPITAL EXPENDITURE
MB POPULATION AND EMPLOYMENT
Cities increasingly rely on other taxes (e.g., utility, hotel) and on
other revenue sources (e.g., fees) to stabilize and grow revenue
aligned with demand for services. Sales and property taxes do
not always track growth in population, employment and wealth.
In 1998, 70% of total revenues were based on sources other than
sales and property tax, compared with 63% in 1988.
REVENUE SOURCES FOR SILICON VALLEY CITIES
15%
Sales tax revenues are determined by retail expenditures and by
sales tax-generating commercial and industrial activities. Property
10%
taxes lag economic growth, and have actually declined by 1% in
real terms since 1988 because of Proposition 13 restrictions on
increases in assessed valuation.
22%
44%
19%
48%
In 1998, capital expenditures continued their upward trend
started in 1997. Between 1988 and 1996, annual capital expendi
tures of Valley communities did not keep pace with population
and employment growth, decreasing in real terms by 10% overall.
Since then, aggregate capital expenditures jumped.52%.
22%
1988
SALES TAX
20%
PROPERTY TAX
Source; State Controller's Reports
1998
I OTHER REVENUE SOURCES
I OTHER TAXES
Special Analysis: Silicon Valley's Digital Divide
By tracking a broad base of indicators that spans the economy, society and environment, the Index
identifies emerging issues facing the region. The 2000 Index reveals a growing Digital Divide in
Silicon Valley.
WHAT IS THE DIGITAL DIVIDE7
The Digital Divide is about more than connecting to the Internet; it is about connecting to opportunity
in the new digital economy. Silicon Valley's Digital Divide is the gap between different communities
in workforce, education, the economy and technology.
WORKFORCE GAP: Our current supply of skilled labor does not meet the needs of the high-technology
companies that fuel our region's economy. Joint Venture's Workforce Study, which was released in the
spring of 1999, identified a workforce gap of 31 to 37% of the high-tech industry demand for workers
in Silicon Valley. The cost of this workforce gap to high-tech industry is approximately $3-4 billion in
incremental hiring and opportunity costs.
WORKFORCE DEMAND OF HIGH-TECH INDUSTRY CLUSTERS
Workforce
Positions Filled By:
Gap
E Local Labor Force 63-69%
■ Commuters 16-18%
■ Outside Recruits 10-12%
■ Unfilled Positions 5-7%
Sources: A.T. Kearney Workforce Initiative Survey, Santa Clara Valley Transportation Authority,
Association of Bay Area Governments, Employment Development Department
EDUCATION GAP: On every measure of educational attainment in this year's Index, wide variation
exists by ethnicity. This is a particularly critical challenge for Silicon Valley, because low education
littainment afflicts our fastest-growing population, Hispanics, most extensively.
• Fifty-seven percent of Hispanic students graduate high school, compared with 86% of white stu
dents and 97% of Asian students.
• On average, 29% of ninth- and tenth-grade students were enrolled in Intermediate Algebra in
1999, up from 26% in 1998. Only 19% of Hispanics were enrolled.
• On average,47% of high-school students completed the course requirements for UC/CSU
entrance in 1998. Only 23% of Hispanic students met this requirement.
• Hispanics earn only 6% of engineering degrees awarded by local universities.
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY,
SILICON VALLEY, 1998
100%
20%
111 i i i i
Asian
Filipino
White
PaciHc
Native
African
Islander
American
American
Sources: Alatneda, Santa Clara and San Mateo County Offices of Education
Hispanic
ECONOMIC GAP: In addition to gaps in our supply of skilled labor and educational preparation, the
region faces wide income disparity among different groups. There has been a widening income gap
during the 1990s in Silicon Valley. While incomes of the lowest 20% of households have increased
slightly the last two years, those incomes are still below 1992 levels (see page 18).
TECHNOLOGY GAP: Access to technology varies by race and income.
• In the San Francisco Bay Area,46% of people with household incomes less than $40,000 access
the lntemet compared to 81% with household incomes more than $80,000(Bay Area Council, 1999).
• Thirty-seven percent of Hispanics in the Bay Area use a computer on a frequent basis compared
to 59% of non-Hispanic Whites (Public Policy Institute of California, 1999).
BOTH THE NEW ECONOMY AND CHANGING DEMOGRAPHICS AFFECT THE DIGITAL DIVIDE
These gaps widen as the New Economy creates new skills demands at the same time that the demo
graphics of the Valley continue to change. As our population becomes more diverse, special efforts
are required to ensure that the Digital Divide does not continue to widen.
As we enter the year 2000, we cross an important demographic milestone: no racial/ethnic group is
a statistical majority. Anglos represent 49% of the combined population of Santa Clara and San Mateo
counties and only 39% of the school-aged population. Population projections point to increased diver
sity of our region as we advance toward 2010.
WE HAVE CROSSED A DEMOGRAPHIC MILESTONE
50%
40%
30%
20%
1995
1996
1997
1998
1999
WHITE %
2000* 2001* 2002* 2003* 2004* 2005*
wmi NON-WHITE %
1999 SCHOOL-AGED DEMOGRAPHICS REFLECT THE NEW SILICON VALLEY
■ White 39%
■ Hispanic 31%
■ Asian and PaciHc Islander 26%
□ African American 4%
■ Native American 0.2%
Source: Department of Finance
♦Projection
IMPLICATIONS FOR SILICON VALLEY
Joint Venture believes that Silicon Valley's continued economic and social vitality is dependent on
our ability to prepare more people in the region for the demands of the new workforce, whether in
high tech or other fields. This is the challenge that will be the focus of Joint Venture's work as we
explore ways to enable all people in Silicon Valley to succeed in the new Digital Economy.
©
One New Home for Every 19 NeW Jobs in South San Mateo Region
WHY IS THIS IMPORTANT?
RATIO OF NEW JOBS TO NEW HOUSING STARTS
Building housing commensurate with job growth helps mitigate
commute traffic, moderate housing price increases and ease
BY SUB-REGION (jUNE 1998-jUNE 1999)
workforce shortages.
HOW ARE WE DOING?
In 1999, an estimated 7,831 housing units were built in Silicon
Valley. This number is lower than the 11,105 units built in 1998.
Multi-family housing was 49% of total starts.
In 1999, the ratio of new jobs to new housing was approximately
3 to 1, because of a slowing in job growth. Since 1992, the Silicon
m
Valley region has added more than 275,000 jobs and created 54,600
housing units(5 jobs for every 1 housing unit.)
Part of what causes commute traffic is the structural imbalance
in the creation ofjobs and housing within Silicon Valley's six
major subregions. Between June 1998 and June 1999, for example,
the southern San Mateo County region produced 19 jobs for
every one housing unit. Southwest Alameda County and South
Santa Clara County produced four jobs and three jobs for
every one housing unit. North and Central Santa Clara County
generated two jobs for every one housing unit.
■■SOUTH SAN MATEO COUNTY 19:1
■■ SOUTHWEST ALAMEDA COUNTY 4:1
■■ SOUTH SANTA CLARA COUNTY 3:1
^3 NORTH SANTA CLARA COUNTY 2:1
CENTRAL SANTA CLARA COUNTY 2:1
nnascoTTS valley 0:1
Sources: Construction Industry Research Board, Employment Development Department
srEviML ARALTSIS: SILICON V A L CE T A N D THE BAY AREA
u
20% OF SANTA CLARA COUNTY'S WORKFORCE LIVES OUTSIDE THE COUNTY.
UP FROM 16% IN 1990
The number of workers commuting into Santa Clara County from surrounding counties increased from
144,000 in 1990 to 212,000 in 2000 — a 47% increase. The commuters' share of total employment in
Santa Clara County increased from 16% in 1990 to 20% in 2000.
Though the absolute number of commuters increased markedly, the shifts in the home counties of
the commuters were only slight. The largest share of commuters,48%, live east of Silicon Valley —
the same as in 1990. The share of commuters from the Peninsula and points north declined from 36%
to 32% between 1990 and 2000. The share of commuters from the west increased from 12% to 15%.
The share from San Benito and Monterey Counties increased from 4% to 5%.
ORIGIN AND NUMBER OF COMMUTERS INTO SANTA CLARA COUNTY
Source: Metropolitan Transportation Commission; Center for Urban Analysis
IMPLICATION
While Tri-Valley,- Santa Cruz County and San Francisco have developed significant concentrations of
technology jobs, the greatest concentration of such jobs still remains in Silicon Valley.
Because 80% of the workforce lives in Santa Clara County, education and training of our residents
remain key to future success.
©
I HCLUSIVE
"■'j- 'r V' '
r^
SOCI ETY
More Students Completing Courses for College Entrance
WHY IS THIS IMPORTANT?
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE REQUIREMENTS
Passing a breadth of core courses required for college entry is a
measure of achievement, capacity and readiness. Completing some
type of education beyond high school is increasingly important
for participating in the high-wage sectors of the Silicon Valley
economy. A Joint Venture survey of the region's fastest-growing
companies found that 84% of positions require education or
50% ■
training beyond high school.
10%
HOW ARE WE DOING?
The share of high school students who complete the courses
required for entrance to the University of California (UC) or
California State University (CSU) systems increased from 43%
null
1992-93
1993-94
1994-95
1995-96
■■ SANTA CLARA COUNTY
1996-97
1997-98
CALIFORNIA
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE
in 1997 to 47% in 1998. Silicon Valley compares very favorably
REQUIREMENTS, BY ETHNICITY, 1997-98
with the state average of 33%.
70%
The number of students completing the requirements in Silicon
Valley has steadily increased since 1994 when only 36% of students
50% —
met the standard.
30%
Performance, however, varies widely by ethnicity. Only 23% of
Hispanic and 22% of African-American students completed these
EfetjEt
courses in 1998, compared with 66% of Asian students and 47%
of white students.
White
Asian
Filipino
Native
Pacific
American
Islander
—
Hispanic
African
American
AVERAGE 47%
Source: California Department of Education
i
T*-*
3
* "
Kit r
t
*
Ki
IKeilUSIVE SOCIETY
11: TRANSPORTAT ION CHOICES We overcome transportation barriers to employment and increase mobility by investing
in an integrated, accessible regional transportation system and other alternatives to driving alone.
Transit Ridership Per Capita Shows No Change
WHY IS THIS IMPORTANT?
People want more choice in how they get to work, to school or
to mn errands. A greater percentage of workers using alternatives
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA .AND SAN MATEO COUNTIES, PER CAPITA
to driving alone indicates progress in increasing access to jobs
and in improving the livability of our communities. Pedestrian-
and transit-oriented development in neighborhoods and employ
ment and shopping centers increases opportunities for walking,
bicycling and using transit.
HOW ARE WE DOING?
Per capita ridership on public transportation did not change in
1999, remaining at 33.5 annual rides per person. Total ridership
31
^^^^^
30
^^^
ifii
i|ii
1990
1993
1994
1991
1992
^
^^
^^
1995
1996
1997
SHARE OF SILICON VALLEY COMMUTERS USING
increased 2%, from 80.5 million in 1998 to more than 81 million
in 1999, but population increased at a similar rate.
VARIOUS COMMUTE MODES, 1999
Ridership increased on light rail, Caltrain and VTA buses, but
■
has decreased on SamTrans buses by 11% since 1994.
Drive .Alone 79%
■ Shared Ride 15%
.A 1999 survey of Valley commuters found that 79% drove to work
■ Transit 4%
alone, 15% shared a ride, 4% used transit and 1.5% walked or
hiked to work. The share of commuters using transit has increased
13
Walk/Bike 1.5%
from 2.8% in 1990. Carpooling also increased from 12.4% in
■
Other .5%
1990, facilitated by a nearly complete system of high occupancy
vehicle (HOV) lanes.
1998
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,
RIDES for Bay Area Commuters
♦Estimate
1999*
The Silicon Valley HousingiCrisis
With Santa Clara County vacancy rates falling
to a three-year low of1.1 percentin 2000^, apart
mentrental costs have soared by 61 percent over
the last three years^. As a result, today nearly
90,000 Santa Clara County renters pay more than
response. The Section 8 housing assistance pro
gram,offers low-income families below marketrate housing. Eleven thousand families in Santa
Clara County,including 7,400 households in San
Jose,currently receive public housing assistance.
When a waiting list for Section 8 voucher assis
tance was opened in 1999, 27,000 added then-
30 percent oftheir income in rent while at least names. Since then the list has been closed and
43,000 renters pay more than half of their in no new families are being added. The San Jose
come in rent®.
Housing Authority officials expect only mini
mal increases in the number of vouchers to be
Additionally,as a result ofrecent price increases made available to this region in the future.
for electricity and natural gas, many low-income
families now face a choice between paying their The Real Impact
rent or their utility bill. In January 2001,15,000
Marcella J., 29, recently emigrated to the United States, works
area Pacific Gas & Electric customers lost their
electricity: a 15 percent increase from January
oflast year. Electricity costs, which previously
accounted for 7 to 15 percent of a low-income
monthly family's budget now claim between 17
and 45 percent'".
ai a fast food restaurantfor$488 amonth. Her husband,"a
construction laborer, may average $1,000 a month. Because
their small, two-bedroom apartment in a run-dovyn complex
costs $1,225 a month, they live.with their two children in one
bedroom and rent outthe other bedroom to four men, who
also work. "I never:thought it would'be as hard as it is," said
Notwithstanding the soaring demand for afford
able housing, the major federal housing assis
tance program has failed to offer an adequate
Juarez, who is worried aboutcrime in-her neighborhood as
well as how to pay. her bills."Everybody talks about how
wonderfulit is in America,,but it's not been easy;'"
"While Silicon
Valley today
remalnsa
showcase for the
New Economy's
successes. It Is
However,the Section 8 program in Silicon Val
ley suffers firom even greater flaws. Neither the
housing certificates nor vouchers offered by the
program provide adequate rental payments in
markets where housing is scarce. For example,
a Section 8 certificate will pay no more than the
difference between a "fair market rent"(FMR)
that is established by the U.S. Department of
Housing and Urban Development and 30%(or
also plagued by
Its shortcomings"
Silicon Vailey^s
Housing Crisis
WORKING PARTNERSHIPS USA i
EVERYONE'S
VALLEY
in some cases 40 /^) ofthe renter's income. As ing a home oftheir own has become more eluof January 20017the FMR for a two-bedroom sive than ever'^
apartment in the county was $1,481". This
amount is well below average rents for units of From 1997-2000, median home prices in Santa
that size in Silicon Valley.As a result, apartment Clara Coimty skyrocketed from $311,146 to
owners have little incentive to accept Section 8 $513,950: an increase of 65%*'*.
certificates until their vacancy rates increase.
Section 8 vouchers, while more popular, also
TheReallmpact
have significant limitations. With a Section 8
voucher, the Housing Authority sets a payment
'-ilOTOFKing in several commtggG
ames M 28
standard to calculate the amount ofrental assis
"When a waiting
tance paid. The family pays the difference be
was forced to turn to a temporary ho
tween that standard and the rent they can find.
agency which founa him a stockroom job
listfor Section 8
There is no cap on rent or on family payment. If
As a temp he earns much less than the
voucher
the payment standard is too low, those with
full-time worker he replaced and his job
assistance was
vouchers may still pay more than they can af
provides no health insurance He has to Jfj-
opened in 1999>
ford.
and weekends askl/v.aiteitf§
27,000 added
their names.
Since then the list
has been closed
In addition to the weaknesses in the Section 8
program, there are also threats to affordable
friend.
rental housing built iu the San Jose area decades
ago with federal assistance.
and no new
families are
Many ofthese housing projects received public
being added."
subsidies in exchange for an agreement to offer
below market rate rents for 30 years. Once that
he has
-rr
deadline has been reached, owners are permit
ted to raise rents to market levels.In Santa Clara
County,9,074 units are in danger ofconversion
to market-rate in the near future".
T't
Silicon Valley's housing crisis doesn't end with
its costly rental housing market: that's only
where it begins. Home ownership is valuable in
promoting neighborhood stability and helping
low-income familiesjoin the middle-class.How
ever, for low-wage workers, the dream ofown-
WORKING PARTNERSHIPS USA:
Policy Briefs:Silicon Volley Equity Series
Silicon Valley's
Housing Crisis
112
BS
'
PROGRESS MEASURES FOR SILIC0N
VALLEY 2 010
Silicon Valley 2010 Goals
'irN-DRiA^s V-x i i:-'tyjlODJJCTjyJTY iAND RROADENS PROSRERITY V
GOAL 1: INNOVATION AND ENTREPRENEURSHIP.
>
P®DRiE;-TrB:^DPRBRTBNI3^J5ES>^
GOAL 10: EDUCATION AS A BRIDGE TO OPPORTUNITY.
Silicon Valley continues to lead the world in technology
All students gain the knowledge and life skills required
to succeed in the global economy and society.
and innovation.
GOAL 2: QUALITY GROWTH. Our economy grows from
U R Jl NCUUS IVJE S0.CI£TY,£0;N!NIOrS^lM'5^
GOAL 11: TRANSPORTATION CHOICES. We overcome
increasing skills and knowledge, rising productivity and
transportation barriers to employment and increase
more efficient use of resources.
mobility by investing in an integrated, accessible regional
transportation system.
GOALS: BROADENED PROSPERITY. Our economic
growth results in an improved quality of life for lower-
GOAL 12: HEALTHY PEOPLE. All people have access
income people.
to high-quality, affordable health care that focuses on
disease and illness prevention.
GOAL 4: ECONOMIC OPPORTUNITY.. All people,
especially the disadvantaged, have access to training
and jobs with advancement potential.
GOAL 13: SAFE PLACES. All people are safe in their
homes, workplaces, schools and neighborhoods.
GOAL 14: ARTS AND CULTURE THAT BIND COMMUNITY.
OUR COMMUNITIES PROTECT THE NATURAL
Arts and cultural activities reach, link and celebrate
ENVIRONMENT AND PROMOTE LIVABILITY
the diverse communities of our region.
GOALS: PROTECT NATURE. We meet high standards for
OUR REGIONAL STEWARDSHIP
improving our air and water quality, protecting and restoring
the natural environment and conserving natural resources.
GOAL 6: PRESERVE OPEN SPACE. We increase the
DEVELOPS SHARED SOLUTIONS
GOAL 15: CIVIC ENGAGEMENT. All residents, business-
amount of permanently protected open space, publicly
accessible parks and green space.
GOAL 7: EFFICIENT LAND REUSE. Most residential and
people and elected officials think regionally, share respon
sibility and take action on behalf of our region's future.
GOAL 16: TRANSCENDING BOUNDARIES. Local com
commercial growth happens through recycling land and
buildings in existing developed areas. We grow inward,
munities and regional authorities coordinate their
transportation and land use planning for the benefit
not outward, maintaining a distinct edge between
of everyone. City, county and regional plans, when
developed land and open space.
viewed together, add up to a sustainable region.
GOALS: LIVABLE COMMUNITIES. We create vibrant
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY.
community centers where housing, employment, schools,
Valley cities, counties and other public agencies have
places of worship, parks and services are located together
reliable, sufficient revenue to provide basic local and
regional public services.
and are all linked by transit and other alternatives to
driving alone.
GOAL 9: HOUSING CHOICES. We place a high priority
on developing well-designed housing options that are
affordable to people of all ages and income levels. We
strive for balance between growth in jobs and housing.
©
SANTA CLARA COUNTY HOUSING TASK FORCE:
AFFORDABLE HOUSING
prepared by:
Susan Silveira
Springboard Consulting
Affordable Housing
State of Cailfomia
Why a Housing Crisis in California?
1. Between 1990 and 1999, buildup permits were issued for an average of 110,581 units
of housing each year. In contrast, permits were issued for an average of215,585 units
per year during the 1970s and 203,369 units per year during the 1980s.'
Housing Units by Permits issued in the State of
Caiifomia
250,000
•
200,000
150,000
100.000
50,000
0
1970-1979
1980-1989
1990-1999
Multifamily housing accounts for the majority of the State's production gap,
particularly housing that is affordable to lower income families. During the 1980s,
for exart^le, Caiifomia added an average of91,682 units of multifamily housing per
year, 45 percent ofthe new housing built. Between 1990 and 1999, the State added
an average of28,089 units per year of multifamily housing,just 25 percent oftotal
housing built during the decade and a 69 percent drop from the levels ofthe 1980s.^
Multi-Famtly Housing Units Built Per Year in Caiifomia
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1980-1989
1990-1999
'"FurthCT ConcOTis R^arding the Low-Inccwne Housing Crisis in CalifOTnia' by Radha Bhattacharya,
Dept. of EcOTomics, California State University, Fullerton April 2001
^ "Further Concerns Regarding the Low-IncOTie Housing Crisis in California' by Radha Bhattacharya,
Dept. of EcOTiOTiics, Caiifomia State University, Fullerton April 2001
2. California's system oflocal government finance limits the amount ofrevenue
generated by housing and encourages local communities to fevor sales tax generating
retail development over residential or other forms ofcommercial development.^
3. The proportion ofeligible households receiving assistance is lower in Cahfomia than
in the nation as a whole. California received fewer Federal housing assistance dollars
in 1999 for each individual living below the federal poverty level than all but one of
the ten largest states. While the Federal government spent on, average, $286 on
housing assistance for each person in poverty, Cahfomia received only $171 per
person in poverty."^
4. A significant firaction ofCalifornia's affordable housing stock is at risk ofconversion
to market rate housing. In the past three years, California has lost more than 15,000
affordable housing units to opt-outs and prepayments, a total of11 percent ofthe
Federally assisted inventory, with most ofthe losses occurring in Los Angeles,
Orange, San Diego, and Santa Clara Counties. The State's Housing and Community
Development Department estimates that more than 180,000 units may be at risk of
conversion from affordable to market rents over the next decade.^
5. Over the last decade, Cahfomia has gone fi-om being a leader ofinnovative state
housing pohcy to a laggard. Among the State's signature initiatives were creation of
the first state housing trast fund in 1985, creation ofa state supplement to the Federal
low-income housing tax credit in 1987,and passage ofthree affordable housing
bonds in 1988 and 1990.^
6. State housing spending dropped substantiaUy during 1990s fi'om 0.7 percent oftotal
spending in 1990-91 to 0.2 percent oftotal spending in 1999-00.^
7. Job growth has exceeded housing growth in nearly every part ofthe State since the
economic recovery began in eamest in 1994. The number ofnew jobs exceeded the
number ofnew housing units in all but 12, primarily rural, Cahfomia counties
between 1994 and 1998. The State as a whole added 3.9jobs for each new unit of
housing, more than twice the 1.5-to-l ratio recommended by housing pohcy experts.^
^'Turther Concerns Regarding the Low-Income Housing Crisis in.California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
"Ibid.
^Ibid.
® 'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
'
Ibid.
*'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State UnivCTsity, Fullerton April 2001
California Spends Less on Housing than Other Major States
California's commitment to alBfordable housing is substantially less than many other states,
in both absolute terms and as a share oftotal state spending.
■ California is one of33 states with housing trust funds. Trust funds provide a dedicated
source offunding for housing programs. California's fond receives a $2 million per year
alloeation from the proceeds ofoil lease payments on state tidelands, less than the initial
$5 million allocation made in the mid-1980s.
■
Overall, Califomia allocated $109.6 million for housing programs in 1999-00, including
$40 million in limited term assistance to the School Facilities Fees Assistance program
and $33.5 million in Low Income and Farmworker Housing Tax Credits. Other states
with much smaller populations spent significantly more:
• Florida. With less than halfthe population of California, Florida allocated $149
million for housing programs for low and moderate ineome families in 1999-00. The
primary somce ofsupport for Florida's housing programs comes from a documentary
stamp tax levied on real estate transfers. This tax provides an ongoing source ofsupport
for Florida's housing trust fimd, including $146 million in 1999-00.
• Massachusetts. In 1998-99, Massachusetts allocated $187 million for housing. Major
program initiatives include $31 million in state support for publie housing authorities,
$39 million for rental assistance programs, and $71 million for capital investments.
• Illinois. Illinois supports its housing trust fund with a dedicated real estate transfer tax.
The tax raised $21 million in 1998; a sum that exceeds California's supportfor similar
programs targeted at low and moderate incomefamilies.
• Washington. With a population one-sixth as large as California's, Washington state's
housing spending is comparable to that ofCalifomia. The centerpiece ofthe state's
expenditures is a housing trast fund fopported by a combination ofdedicated revenues
and appropriations from the state's capital budget. The fund provided $62 million in
support for housing constraction and preservation programs during the state's 1999-00
biennium, plus $5 million for homeless families and $8 million for fermworker housing.
• New Jersey. New Jersey allocated $48 million in state support for housing programs
in 1999-00. Ofthis amoimt,$29 million eomes from a dedicated real estate transfer tax
that provides an ongoing source offunding for the state's affordable housing programs.
• Oregon. Oregon, with a population of3.3 million, allocates interest earned on renters'
security deposits to a trust fimd used to support low income rental housing. In 1997-98,
the fimd received $4.5 million, approximately equal to California's multifemily housing
spending in the current budget year.^
'Locked Out: California's Affordable Hoiising Crisis. Califomia Budget Project May 2000
Support Provided Through the Tax Code Favors Higher lucome Households
The structure ofthe tax preferences available for homeownership fevors high-income
households by allowing taxpayers to claim deductions not only on their primary
residence, but also on second homes. The tax code also allows deductions for interest
payments on mortgages ofup to one million dollars, far in excess ofthe amount needed
to finance an average priced home. The bias toward higher income households is greater
since low to middle income Califomians pay little or no state income taxes and thus
receive minimal if any benefit fi-om the deductions claimed by higher income ta3q)ayers.'°
In 1999-00, home mortgage deductions reduced state tax collections by an estimated $2.9
billion. Property tax deductions and the preferences for capital gains associated with the
sale ofa home cost the state $590 million and $790 million in lost revenues, respectively.
In 1998, nearly half(48 percent) of all mortgage interest deductions were claimed by the
eight percent oftaxpayers with incomes in excess of$100,000. The capital gains
preferences benefit an even narrower high income bracket, with 85 percent being claimed
by house holds with incomes over $100,000. In contrast, the state's one broad-based tax .
preference for renters, which was eliminated between 1993 and 1997, cost an estimated
$140 million. At $60 for single taxpayers and $120 for families, the benefits are modest
in comparison to those available to those who own their own homes. Finally, the state
finances a property tax exemption on the first $7,000 ofthe value ofa home."
\
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a booming economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent ofCahfomia households owned their own homes in 1999,
compared to 66.8 percent for the nation as a whole.*^
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent ofhouseholds could afford to purchase the median priced
home in 1999, as compMed to 37 percent of California households. Only 27 percent of
the region's households can afford the median priced home in the Bay Area, and even
fewer(23 percent) can afford the median priced home in Monterey County. The median
California household earns less than two-thirds the income needed to purchase the
median priced home.'^
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
"Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Hou«ing Aff«id«liifty in CdifornMW W»tl D«lowlh«Nali»n4d Awiog*
UrttadSdMa
43>.
»T*
»TV
CdMii^a
\
IM4
liM
lUI
«i
tMrs
i«eo
;«ii
lifc:
CiriiotnU'te HoiiMOwnoiship R4t«s
aftTH
iw I
:«!•
tosti
'iMJ
liU
loan
Tlios*of tfao N^lloii
«■>»
f
I
J
i
*
'-;:A
X.
+H
\
\
\ \ \
\
V\
%
California's low-income homeowners experience significant housing cost burdens. Over
half (54 percent) of the low-income homeowners in the state's metropolitan areas spent
over half of their income for housing in 1997.
California's high home prices make it difiBcult for renters to become homeowners. The
income needed to purchase the median priced home is more than twice the income of the
state's median renter household ($27,401 in 1998). Fewer than one out of twenty new
homes sold in 1999 were affordable to households with incomes at or below the median
for California renter households.
Housins Affordabllhy Vaiies Widely Across CciHfomla
^ MK • •
«
-
rv
,
MS
/y//./
1--4
// ^///
<F
Low Income Renters Face the Largest Challenges
Aflfordability problems for renters become more severe as incomes decline. Nearly twothirds(65 percent) oflow income renters in the state's metropolitan areas paid more than
halftheir income for housing in 1997 and 86 percent spent over the recommended 30
percent oftheir income on housing. The rent burdens faced by low-income households in
the seven California metropolitan areas covered by the Census Bureau's American
Housing Survey all ranked within the top 12 ofthe 45 metropolitan areas surveyed during
the mid-1990s.''*
The number of Califomians in need ofaffordable housing far outstrips the supply oflow
cost units. In 1997, the number oflow-income renter households in the state's
metropolitan areas exceeded low cost rental units by 2.1-to-l, a
of684,000 units. In
Orange County, low-income renters outnumbered low cost rental units by more than 4-to1. In Los Angeles County, the number of low-income renters exceeded the number oflow
cost units by 2.3-to-l.'^
Locked Out: California's AffOTdable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. CalifcHTiia Budget Project May 2000
TaMe2: Low tiicoino Rontw* Oulnumboi AliofdalrloUnits in Csifoinia
Ratio of I ow
MeUopolildi) C dSrorriia (1997]
Number
Number «f
Shofta^al
Income
of Low
Law Cost
Lew Cost
Renters to
Income
Kenlal
Rental
Low Coot
Renters
Unrts
linils
Units
1 287.400
603.400
684 200
2.1-ti>l
555G0
1220O
436C0
4 6-10-1
sasiloo
237 200
301.400
2.3-to-1
17JDD
2.3-to-1
62,700
2.3-t!>1
AnaheimSarf6 Aia
1.05 Aflgele^^Long Beach
(1997]
Oakland (13'JBi
(199 a]
34^00
uom
Siicramtf^ (1996)
San Diego(1394]
San Francisco (l9E)a)
472D0
56200
272D0
29CC0
2.1-tD-l
112200
sosno
615OO
2 2-riv1
752OO
39.400
35JB00
■"i.HJCi
1.9-to-l
2 3-t!Vl
Low nemo ncrtrfAor? drirpriar N»5P v«h iruscrhstrmiror iiywS1S,i.l1Cu«r '/w Low eo< irrW .rttriiie
fro* fr flficrt io'l''.-'sihBnS4UC: prr mpflh
SLUrc«. wSr>«u«!tf «>tvrt.rr'«r.«.dJ«KUO:fr«C«i'«;«,
Devsicpnen!. w sr an ^ouaro i. jse <e
Market Rents are Higher than Fair Market Rents
Many public programs use Fair Market Rents (FMRs) as a measure of housing costs.
FMRs are published annually by the federal Department of Housing and Urban
Development (HUD). FMRs are used to determine the maximum subsidy that can be
provided through the Section 8 and a number of other federal housing programs. FMRs
estimate the cost of rent and utilities, other than telephone service. FMRs are currently set
at the 40^ percentile within an area. In other words, the FMR is the cost below which 40
percent of the housing units in an area would rent for less and 60 percent would rent for a
higher amount. FMRs are based on the rents paid by households that have moved within
the past 15 months.'^
The California Budget Project compared 1999 FMRs to survey data produced by
REALFACTS, a widely used private database research service, for September 1999. The
FMR for a two-bedroom unit was below the market rent in 12 of the state's 16 largest
counties. In Los Angeles County, the difference was significant. The 1999 FMR for a
two-bedroom unit was $749, while in September 1999 the average rent for an apartment
with two bedrooms and one bathroom was $881, a gap of $ 132 or 18 percent. Among the
12 counties where market rents exceeded FMRs, the disparities for two bedroom
apartments ranged fi-om a low of 4 percent in San Joaquin County to a high of 75 percent
in San Francisco. In recognition of the gap between the FMRs and market rents, HUD
recently made a special adjustment to the 2000 FMR for San Francisco.'^ This adjustment
increased the FMR for a two-bedroom unit fi"om $1,362 to $2,043.
The disparity between FMRs and market rents is important. When FMRs are significantly
below market rents, recipients of Section 8 certificates, which can be used to rent a unit in
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
" Locked Out: CalifOTnia's Affordable Housing Crisis, California Budget Project May 2000
the private market, have a difficult time finding a landlord willing to accept their
certificate. In areas with particularly tight rental housing markets and rapidly escalating
prices, FMRs are likely to underestimate the amount families must pay in order to rent an
apartment and underestimate the level of assistance needed to make housing affordable.
I ar MarKAi
as c ompafM] m Wirtwi H^nrs
l air
sapifttiiha*
Mdikei
1999
Market
ctJiJNiy
Aomcdi
Kwri
Ji .CI&&
5953
592
ssoe
54SO
iciri
5515
1505
KifD
6981
6152
1900
569
seo
13%
1703
11C6
ie%
$729
1019
590
15%
51.167
12.1:^3
f8^
76%
5S9;
1617
525
11.391
1227
Riv^rsio©
S597
1677
^ncroTTierto
5551
1039
Sen BerrsidinD
sen MEieo
SHila BirtPlKei
S'viin Cmro
F^ieairace i^iember
bitfefence
«sei
sari
SiMi Prsrclsoo
Peicentage
Sfeei
Lo«
1S»fi IMrcd
Dola
DMereric*
51.167
t"95
11%
•15%
0%
4%
10%
5BTB
1816
«<a2)
-7?fe
51.139
11.330
1131
1?%
5793
191?
5139
1R%
u$ QeeeeTieitelltousreandUrtart DeKei^nteiS
California is currently home to eight ofthe 10 most expensive metropolitan areas housing
markets in the country. The median home price in the State is more than $100,000 higher
than the national median and almost half of California renters cannot fair-market rent on
a two-bedroom apartment.'^
The metropolitan areas with the most severe affordable housing crisis in Califomia-when
viewed on the national scale-are Marin County, San Francisco County, San Mateo
County, Santa Clara County, Orange County, Oakland, San Luis Obispo, Santa CruzWatsonville, Santa Barbara, Los Angeles, Vallejo-Fairfield-Napa, Stockton and Ventura.
The counties with the greatest projected growth in terms ofaverage annual housing
construction need are: San Diego County, Los Angeles County, San Bemadino County,
and Riverside County.'^
Controller's Quarterly: Housing in California, Spring 2001
"Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. of EcOTomics, California State University, Fullerton April 2001
Statewide, we will need almost one million housing units in the next five years, but we're
not producing even halfofthat.^^
Demand for Federally Assisted Housing is Intense
CMnh»4
Lost moMMe Unis*
T«<dl UiiiK
A recent survey oftwenty local housing authorities found 371,740
families were on waiting lists for Section 8 assistance, more than
three times the 104,133 families receiving assistance.'®^ The
survey found 93,632 families wait listed for 25,268 units of public
housing. Moreover, actual demand for housing assistance may be
much higher since many agencies periodically close waiting lists
to new applicants and some hold lotteries to determine who will be
allowed access to the waiting list. The Alameda County Housing
Authority, for example, received 15,000 applications for assistance
when it opened waiting lists for assistance in August 1999. The
Agency then held a lottery to reduce the number offamilies that
would be added to the waiting list to 3,000.^'
As a result, thousands offamilies languish on waiting lists for
federally supported housing assistance. In the City ofLos Angeles,
155,000 names were on the waiting list last year for Section 8
housing assistance; 35,000 families currently receive assistance.
There were more than 11,000 femilies on the waiting list for public
housing, with the largest demand for three and four bedroom units.
In Fresno, 12,000 families are on the Section 8 waiting list and
housing authority officials estimate that the average wait for
assistance is four to five years.^^
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Loss of Federally Subsidized Housing Threatens to Shrink
Supply of Affordable Units Further
317
SDHufre
78
Btanisiaus
Over the past three decades, the federal government has provided
assistance to developers of affordable housing in the form of
guaranteed rental payments and low cost financing in exchange for
a commitment that rents would remain affordable.'®"' This
arrangement assured property owners rents sufficient to pay debt
service and operating costs and provided sorely needed housing for
low income femilies. ^
142
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Many ofthe projects built with federal assistance are reaching the expiration dates of
their contracts to maintain affordability, putting a significant fi-action of California's
20
Affordable Housing-Bridging the Gap" by Jan Breidenbach, Controller's Quarterly Spring 2001
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
^ Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
afifordable housing stock at risk ofconversion to market rate housing as landlords allow
these contracts to expire. Moreover, in 1996 Congress restored the rights ofowners to
prepay their HUD-assisted mortgages, giving property owners in areas with rising rents
the ability to refinance and convert to market rents. In the past three years, California has
lost more than 15,000 affordable housing units to opt-outs and prepayments, a total of 11
percent ofthe federally assisted inventory, with most ofthe losses occurring in Los
Angeles, Orange, San Diego, and Santa Clara Counties.
What Types of Subsidized Units are At Risk?
Several federal programs provide assistance to affordable housing developers in exchange
for a commitment to maintain affordability. Assistance received by developers of units
currently at risk ofconversion to market rents includes:
• Below market interest rates ranging fi-om one to three percent and mortgage insurance in
exchange for 20-year affordability commitments. As of May 1998, approximately 15,000
units were eligible to convert under the prepayment rights enacted by Congress in 1996.
• Project-based subsidies under the Section 8 program whereby the federal government
committed to subsidize rents for 15 or 20 years. Under the Section 8 program, tenants pay
no more than 30 percent oftheir income for rent. The average income of California Section
8 participants is approximately $10,000 per year and over 40 percent ofthe program's
participants are elderly or disabled. Nearly 100,000 units are at risk of conversion over the
next six years.
• Housing financed with the proceeds oftax-exempt bonds. California, like other states,
issues tax-exempt bonds to finance housing construction. Most ofthe housing financed by
tax-exempt bonds serves a mix ofincomes, placing these units at particular risk for
conversion. Approximately 28,000 units of bond financed housing are at risk of conversion
to market rents.
The state Department ofHousing and Communitv Development(HCD)estimates that
more than 180,000 units may be at risk of conversion fi-om affordable to market rents
over the next decade. Already, some units judged at low risk of conversion based on the
type ofsubsidy received, location ofthe property, and owner, have been converted to
market rate rents. Without governmental action, property owners are likely to convert
these units to market rents over the next few years, displacing existing tenants who will
be unable to shoulder the burden ofsignificantly increased rents.^^
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
^ Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
10
AffoiddbU Unlr« Ai Rfek in Caiifoinid
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Homeless
By definition, the homeless face the most severe housing crisis. The state Department of
Housing and Community Development (HCD) estimated that 361,000 Califomians, just
over one out every hundred (1.1 percent), were homeless in 1996-1997. Most of the
state's homeless are concentrated in Los Angeles, San Francisco, Sacramento, and the
Central Valley region. One out of every twenty-five residents of San Francisco (4.0
percent) was without a home in 1996-97.
Ciklifoinid R«««}vw L«»6 f odotdl Housing Acvfeldnce Pot Pms«ii In
Poverty Titan ARbut One of the Ten i aigeei Stateo
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11
Strategies
In her Spring 2001 Quarterly Report, State Controller, Kathleen Connell States:
With an annual deficit ofabout 100,000 units per year and only one
home being created for every 3.5 new jobs in the State, California's
housing situation poses a,real and immediate threat to the well being
ofCalifornia's otherwise healthy economy. The solution to this problem
will have to be multi-faceted. At the local level, we will need zoning
and land-use policies that accommodate more housing and higher densities.
We will have to take back slum housing for rehabilitation into decent
and safe housing that will revitalize our blighted communities. We will
need to fund the production ofaffordable units and e3q)edite the
coiistruction of market-rate housing. Finally, we will need meaningfiil
reform ofour State fiscal system that disincentivized local governments
from building housing for over twenty years.
California Needs a Renewed Commitment to Affordable Housing
Public policies — af all levels ofgovernment — can play a significant role in addressing
the state's current housing crisis:^^
/
■
Increase the Federal Government's Commitmentto Housing. A renewed federal
commitment to affordable housing including additional financial support is essential
to solving California's housing crisis.
■
Use Existing Resourcesfor Affordable Housing More Effectively. While additional
resources are clearly needed to address the crisis, more hotising could be buUt by
using existing resources more efficiently. Steps that could be taken include targeting
redevelopment funds to worst case needs and ensuring the.housing set-asides are
spent on a timely basis; increasing coordination and'colMboration between the state's
multiple housing programs; enforcing local"feir share" requirements to ensure that
local communities meet the demmid for housing at all income levels; and reforming s
the structure oflocal government finance to miriimize the fiscal disincentives to
residential development.
■ Increase State Supportfor Housing. California's affordable housing crisis will only
be addressed through an increased commitment,ofpublic resources. The state's strong
fiscal condition offers the opportimity to make major investments that will benefit
California's families and communities in the decades to come. Potential sources of
state support include: increased,support through the annual budget; usirig one time
moneys to endow the state's housing trust fund; and placing an affordable housing
bond measure before state voters.
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
12
Santa Clara County
San Jose ranks fifth as one ofthe nation's most expensive housing markets and second as
the least affordable metropolitan statistical area in the us.
Only 16% ofhouses in Silicon Valley are affordable for households earning the median
income, down from 31% in 1999. This contrasts with the national average of60%.^'
In 1999, only 37% ofSilicon Valley houses were affordable for households with a
median income, down from 38% in 1998. This number contrasts with the national
average of68%.^°
By the year 2004, Santa Clara County will Avitness the creation of32,000 new jobs in the
traditionally low-wage food service and building maintenance industries and the retail
sector.^^
Last year, the Santa Clara County vacancy rate fell to a three year low of1.1%, while
apartment rental costs have soared by 61 % oVer the last three years.^^ Rents have jumped
more than 60 percent in the past five years in Santa Clara and San Mateo counties and
more than 50 percent in Alameda County.^^ Though high-income residents are able to
"compete" for rental housing, moderate and low-income families are not.
Today, nearly 90,000 Santa Clara Coimty residents pay more than 30% oftheir incomes
in rent. 43,000 residents pay more than halftheir income in rent.^^
From 1997-2000, median home prices in Santa Clara County skyrocketed from $311,146
to $ 513,950: an increase of65%.^®
Santa Clara County has the fifth highest percentage in California ofhousing likely to
contain significant amounts oflead, at 60,621 units. An estimated 10 percent ofhousing
in Santa Clara County is "substandard": a category that includes units built before 1940
and structures with inadequate plumbing, heating, or sewage disposal.^^
Faced with an average monthly rent of$1,760 for a one-bedroom apartment in the
county, a beginning teacher earning $40,500 would have to devote 73% ofher take-hone
38
pay to rent.
Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
,Dept. ofEconomics, California State University, Fullerton April 2001
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2000 Index of Silicon Valley
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partner^ips USA Jime 2001
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Everyone's Valley, Working Partnerships USA June 2001
.
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
"Ibid.
Everyone's Valley, Working Partnerships USA Jime 2001
13
In San Jose, a minimum wage worker would have to work 175 hours per week to afford a
2-bedroom apartment.^®
^
'
Excerpts from Santa Clara County Collaborative on Affordable Housing and Homeless
Issues' Five Year Plan:
The severe deficit ofaffordable housing is the major reason that annually there
are 20,000 episodes ofhomelessness in Santa Clara Coimty. This problem has its
roots in the County has its roots in the huge housing/jobs imbalance where for
eveiy four jobs created in San Jose, only 1 new housing unit is built. The
Association ofBay Area Governments 1995-2020 Forecast Period shows a
coimtywide deficit between housing unit supply and projected household growth
of35,180 units.
This situation is exacerbated be the gap m income between those who are most
well offin the County and those who are just scraping by. Even^some make
just over minimum wage, others in the County are extremely prosperous, giving
Santa Clara Coimty a median monthly family income of$7,636, nearly $3,000
more than the median for California. This combination ofprosperity limited to
select sectors ofthe pppuktion coupled with the continually growing imbalance
between housing supply and demand has created a housing market in which many
are simply not able to compete. The feir market monthly rents for the year 2001
in the County is expected to be $928 for a studio, $1,058 for a one bedroom unit,
$1,308 for a two bedroom unit, and $1,792 for a three bedroommnit. The median
house price in San Jose is $485,000 and for a condominium it's $295,000.
A person in Santa Clara county needs to earn $20.35 an hour to rent a one
bedroom apartment at fair market rent; yet the incomes ofthe bottom third of
Silicon Valley workers is only $10.54,11% less than in 1989.
What do experts predict about the housing market?
'Tt feels to me like the market has crested." Brad Ininan, CEO,HomeGain quoted in San
Francisco Magazine, November 2000
"As long as salaries go up and some home buyers can pay cash for homes, prices Avill go
up"Ira Serkes, coauthor ofHow to Buy a House in Califomia. quoted in San Francisco
hfegazine, November 2000
"Once jobs begin leaving, home prices will moderate." Leslie Appleton-Young, Chief
Economist, California Association ofRealtors, quoted in San Francisco magazine,
November 2000
'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, FuUerton April 2001
14
The average price ofa home in Santa Clara County is now an astounding $560,550. The annual
base salary ofa police officer in San Jose is $51,272;the base income ofa firefighter in the same
region is $32,000. A few mathematical calculations add up to the unhappy conclusion that public
safety officers simply cannot afford to live in the communities they serve. Although Santa Clara
County encompasses one of California's most extreme examples oftoday's record housing prices,
the salaries ofpolice officers and firefighters throughout the state are inadequate to buy homes in
higher-priced urban areas.^^"
The median price ofhomes sold in Santa Clara and San Mateo counties dropped slightly in May,
the first time in several years that the prices fell compared with the previous year. The number of
homes sold continued a six-month decline-down 16 percent in Santa Clara County and 14 percent
in the Bay Area as a whole.
The median price ofan existing single-family home sold in Santa Clara Coimty fell to $473,000 in
May, down 0.2 percent compared with May 2000, according to Data Quick Information Systems.
It's the first time since June 1994 that the county's median price has fallen compared with the
same month in the previous year. Last month's median price also is a decline of5.4 percent fi-om
ApriL''^
Strategies
Inclusionary zoning in the Mid-Coyote Valley and other infill areas would create coordinated
programs, imposing obligations on both the public sector and developers,to create housing that's
affordable for femilies and profitable to business. Approximately 8,600 units of additional
housing, including thousands ofunits for extremely low and very low-income femilies, could be
developed at a cost of$1.2 billion.^'^
A housing "superfimd" can be created to finance new affordable developments. This "superfimd"
would be coirq)osed ofrevenue generated through a temporary increase in the sales tax or the
issuance of general obligation bonds. When combined with other available fimds, commitments
fi:om developers, and capital generated by a marginal increase in the percentage ofredevelopment
agency fimds allocated to housing, the "superfimd" could underwrite the cost ofthe entire
inclusionary zoning program
Strengthening the rights ofarea renters is essential to protect the existing supply of affordable
housing firom gradually being transformed to costlier units. This could be achieved by improving
Silicon Valley's current rent control measures, enacting rent control in communities lacking
protections, and establishing safeguards against unjust evictions.^'^
"Housing for Public Safety" by Assemblywoman Rebecca Cohn, Controller's Quarterly Spring 2001
San Jose Mercury News,Jime 26,2001
San Jose Mercury News, June 26,2001
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
SANTA CLARA COUNTY HOUSING TASK FORCE:
AFFORDABLE HOUSING:
SUPPLEMENTAL MATERIALS
4 PROPOSED SOLUTIONS TO LOW INCOME HOUSING
AFFORDABILrrY
Xhe worsening ofthe affordable housing short^e in the case oflow-income households
directly stems from 2 reasons: a drop in the number of unsubsidized low-cost rental housing
units in the private market and a growing number oflow-income renter households. The
latter occurred because disproportionately more jobs that were created in certain areas in
California were low-income jobs. The &st part ofthis chapter(Section 4.1)presents Steps
that State policy makers can take to insure that the solution to middle-income hosing
affbrdability does not make low-income affordability worse. The second part ofthis chapter
(Section 4.2)presents the case study ofthe Housing Trust ofSanta Clara County(HTSCC).
4.1 Steps That State Policy Makers and Housing Personnel Can Take
Density: Raising the development capacity ofexisting sites increases the overall
potential supply of housing by malnng more intensive use ofavailable land. Higher
densities <*aTi improve the affordability ofhousing because per umt land,costs are lower and
construction can be performed more efficiently. Density increases near employment centers
and transit nodes can also help to alleviate automobile congestion. Many counties have
incorporated these"Smart Growth" policies in their consolidated plans. Communities can
adopt zoning and/or subdivision regulations to allow a "density bonus" above that which is
normally permitted on the site in exchange for the provision ofsome below market rate
housing units. Local authorities could enhance compatibility between the new higher
density development and existing development and focus public debate on the actual
appearance and effect of new housing rather than arbitrary density numbers.
44
Inclusionary Zoning: Inclusionary zoning stipulates a minimum percentage oflow
and moderate-income housing in new developments.Inclusionary programs are based on
mandatory requirements or on development incentives, such as density bonuses. The
establishment ofinclusionary zoning does not depend on State or Federal subsidies or the
direct involvement of outside agencies.It is a local requirement under local control. If a
jurisdiction is attempting to alleviate the acute housing shortage for low- to moderate-
income households through zoning, inclusionary zoning is a good choice.
Office/Housing Linkage Programs: Some communities with a housing crisis have
found it necessary to require new industrial, commercial, and office development to aid in
the development ofhousing.In a linkage program, project approval is conditional with the
applicant either directly providing market rate and/or afifordable housing, or paying m-lieu
fees for housing purposes. Linkage programs can be mandatory in which all new non-
residential development must devote, or pay in-lieu fees, a percentage oftheir development
to affordable housing. Cities experiencing large-scale employment growth can use linkage
programs to mitigate the impact ofnew jobs on the local housing market or community as a
whole. Some housing authorities doubt the merits ofthis approach;they favor the "carrot"
approach rather than a "stick" approach.'"
Rezoning Vacant Landfor Residential Use: Many areas in Southern California and
the Bay Area have a shortage ofland designated for residential use and a surplus ofland set
aside for commercial, office, and industrial use. Politically, changing the general plan and
rezoning surplus industrial and/or commercial land can be an effective way to make a
significant amount ofland available for housing. In addition, underutilized agricultural land
and surplus land owned by public entities can be rezoned for residential use. Many
45
communities own land: unused school sites, surplus public properties, and even the air rights
ofparking lots. All have the potential to house a new residential development.
Mixed Use: In contrast to conventional single use developnient, mixed use
development ofa tract ofland or structure combines residential uses with one or more other
uses such as office, retail, public, entertainment, or even manufacturing. Mbdng uses often
requires changes to the zoning ordinance or planned umt development regulations. To
encourage housing, a commumty can allow residential uses in commercial areas and other
non-residential zones,especially downtowns,thereby creating multi-use areas.
Infill: Ttifill development occurs on sites that have been bypassed by previous
development Utilities and other inffastructure typically already serve infill sites; this can
reduce the ffont-end costs of development. These sites are often well suited to multiple
family projects, as more units offset higher land costs and make housing more affordable
Landbanking: The development of affordable housing depends,to a large degree on
the availability ofa site. Landbanking is a technique whereby a city or county,in
anticipation offuture development,acquires vacant land or underutilized sites at a lower
cost or before it comes on the market State law gives local governments, and non-profits,
priority in the purchase of surplus land. When resold or leased to a developer,restrictions for
the development ofaffordable housing can apply.
Growth Control Exemptions: Many jurisdictions have enacted ordinances to control
their growth. They may do this by limiting the number ofbuilding permits that can be issued
each year, limiting growth in specific areas or corridors and encouragmg it in others, or
restricting major development until certain infrastructure performance standards are being
achieved. Although removing these growth limits may be the most effective way to improve
46
overall affordability,the growth control criteria by which projects are permitted can be
designed in such a way as to encourage certain types of affordable housing.
Adaptive Reuse: The conversion ofoutmoded buildings such as old school buildings,
train stations, warehouses,factories, and other industrial buildings, can provide the
opportunity for new residential uses within a community. ^^
Self-Help Housing: Self-help, or sweat equity, housing enables potential
homeowners to build up credit for a down payment on a home by contributing their labor to
the construction or renovation. California Housing Finance Agency(CHFA)finances self-
help housing by providing below market bond financing for mor^ages on homes in urban
areas. The Farmers Home Administration Mutual Self-Help Housing program has sponsored
many rural projects.
Factory-Built Housing: Factory-built houses are the least ejcpensive to construct.
Once built, these prefabricated houses blend with custom housing. Manufactured housing
are factory built mobile homes built to the HUD mobile home standards.
Mobile Home Park Preservation: The preservation of mobile home parks allows a
community to protect a valuable source of usually irreplaceable affordable housing.
Senior Housing: Typical techniques to meet the housing needs ofthe elderly include:
smaller attached or detached housing for independent living (both market rate and
affordable); second units; homesharing for those who wish to stay in their homes; age-
restricted, below market rate rental projects; congregate care facilities; lifecare facilities
(similar to congregate care, but where occupants own their own condominium or
cooperative unit); residential care homes licensed by the State; and skilled nursing homes.
47
Single Room Occupancy Hotel: Formerly homeless people often find SROs an
affordable entry point into the housing market. The availability oflow-cost SROs can also
protect some people ftom becoming homeless.
Streamlining Procedures: Recogni2ang that administrative delay adds to
development costs,jurisdictions have reviewed and streamlined their land use and
development procedures. The intent is to simplify and coordinate the means of obtaining
rezonings,use permits, subdivisions, approval of design and engineering plans, and building
permits.
PATFf; The energy costs of housing are among the most controllable factors
affecting housing affordability. High utility or energy costs could be the final factor that
forces a family into homelessness. (Especially considering the current"energy crisis that
California faces.) The Partnership for Advancing Technology in Housing(PATH),reduces
the cost ofbuilding and operating homes by helping to speed the adoption ofnew
technologies in building as well as in saving energy. PATH homes lead to a 20%
reduction in the purchase price of a home.
Effective Use ofLocal Resourcesfor Affordable Housing: Private sources of
financing and funding are available, and growing. Foundations, banks, savings & loans, and
private investors have become much more active in assisting in the development of
affordable housing. California voters have passed several bond measures to fund
rehabilitation and construction ofa significant amount ofaffordable housing.
Municipal bonds put the power ofpublic finance to work for affordable housing. Because
the holders of municipal bonds pay no taxes on the interest they receive, Ipcal bonds have
48
lower interest rates than conventional financing. Local governments can also apply other '
financing tools to assist in residential development
State Funding has been given a boost by the passage oftwo bond measures to make
available $450 million statewide for new construction and rehabilitation of affordable
housing. Private Resources are available fi:om banks,and savings and loans as well as
private investors. Commitments to the community.Federal regulations, and the tax code
have helped create several financing and subsidy sources for the development of affordable
housing.
Package and Advertise Information on HomeBuyer Assistance and Low Cost
Rentals: Lack ofknowledge ofall programs and resources is a final barrier to home
ownership. Housing Authorities should have homeownership feirs, seminars and trainings
have greatly assisted would be purchasers in sifting through the glut ofdata and claims made
by lenders.^^
Expand City-County Partnerships: Many cities have established redevelopment
areas. Under State law,20% ofgross redevelopment revenues must be set aside into a low-
income housing fund(LIHF)and be spent on eligible housing activities. Many cities have
substantial fimds that have not yet been allocated or encumbered. If counties enter into
partnerships with such cities to encourage rehabilitation, new construction or
homeownership within an incorporated city,the county should expect to leverage that city's
resources in the following ways.
■ Coimties should undertake efforts to identify all surplus county-owned property with the
intention ofselliug or leasing the land for affordable housing projects, where appropriate
and feasible.
49
■ Encourage development of affordable housing on parcels located in the unincorporated •
areas ofthe county 'vsdiere land may be cheaper.
* Donate, selling or leasing land at a significant discount v^en the land is being used for
development of affordable housing
The
Affordable Housing Strategy, 1999, mentions several gmding principles
for Orange County. Many ofthese principles have a general appeal that could be used as
general guidelines
* Given limited resources, do not compete with the private sector.
■ Coordinate county efforts in support of city efforts.
■
Stimulate activities that would otherwise not occur.
■ Help those who are attempting to help themselves
» Help with a hand-up,not with a handout
■ Tackle problems affecting communities, notjust individuals.
■ Focus on lending, not granting.
■ Focus on leveraging other resources, not duplicating them.
■ Focus on roles that ntiliVg the strengths of other institutions such as lenders' expertise.
■ Focus on efficiency, for example,use Section 8 operating reserves more efficiently.
■ Reducing program administration costs by linkmg programs and desiguating one lead
agency.
■ Keep approaches as simple as possible and fill iu gaps.
■ Maximize the efficiency ofhousing authority by having outside firms handle routine
tasks such as origination, servicing, monitoring, and on-going marketing.
50
■ Reverse neighborhood decline in targeted unincorporated islands in a coordinated effort
to encourage their annexation.
» Provide 3 options for loan subsidy approaches to owners who are willing to maintain
their rents at affordable levels for 10 years. This will reverse nei^borhood decline.
Option 1: Offer interest write-down grants through existing financial institutions
for qualifying rental properties, and market the program jointly with participating
lenders. HUD has studied rental programs around the country, and found that
this strategy can lead to a high level ofefficiency and leverage. The loan would
be due in full, possibly with a penally or higher interest rate, if rents rise above
affordable levels. Market the low interest loansjointly with lenders.
Option 2; The County provides direct second loans to qualifying apartment
builders. The second loan would be on a residual receipts basis and forgivable, a
tenth at a time,over ten years. Rents would be capped at affordable levels for
these 10 years. The county would monitor performance in al these cases.
Option 5; Set up a loss reserve program. The housing authority would deposit a
sum with lenders to be held as a reserve for losses on a second mortgage.
Lenders would make loans for needed rehabilitation to qualifying apartment
owners. Rents woiild be limited for 10 years at affordable levels with penalties
for non-compliance HOME and redevelopment funds can be used for rental
rehabilitation efforts.
4.2 Case Study—^Housing Trust of Santa Clara County
Santa Clara County-the heart ofthe booming Silicon Valley-faces a severe crisis
ofaffordable housing. In Silicon Valley, you are at the poverfy level if you are making
51
1 ft
providing skills, services and opportunities for families to move up and out of poverty.
Wheeler Creek embraces the best in Smart Growth policies: infill development, attacking
blight, creating open space and encouraging economic development
5 SPECIFIC POLICY SUGGESTIONS
Considering that in many areas ofthe state there is a crisis in middle-income housing
affordability,the following policy suggestions have been proposed to assist in developing
greater low-income housing assistance:
■
Correct counter productive regulations. The State's housing element approval process
has imposed unanticipated constraints on the ability oflocal governments to jointly
respond to affordable housing opportunities. The State Housing and Community
Development Department(HCD)is required by law to review each jurisdiction's
Housing Element and find it either in or out ofcompliance with State law. State law
requires that each individual community provide the full array of affordable housing
development resources(developable land, financing, voter approval,etc.) Given the
drive toward regional planning for regional housing needs,it has been a counter
productive policy.
"
■ Correct the number ofbarriers to low-income housing development that are present in
Article 34 ofthe California Constitution. Article 34 requires local voter approval oflowincome housing developments when units are to be publicly owned,or privately owned
but financed 1^ public agencies, and more than 49% ofthe units are reserved for lowincome occupancy. New legislation should require jurisdictions to ensure compatibility
ofnew construction with the character and scale ofthe surrounding neighborhood. With
57
this in place, legislation could seek to amend Article 34 so to make it more favorable to
development ofaffordable housing.^^
■ Revise State guidelines to permit a comprehensive approach to meeting the housing
needs ofagriculture workers. State guidelines for agricultural worker housing have
restricted the ability oflocaljurisdictions to use available funding. The agricultural
worker population is general engaged in work on a permanent year round basis, as
opposed to primarily seasonal or migratory. State funds for ^riculture worker housing
are devoted solely to the needs ofmigratory workers.
■ Remove the inconsistencies in CDBG. Such things as five-year plans vs. one year
allocations.
■ Remove CDBG restrains thatprohibit the involvement offor-profit housing developers.
■ Try to change the Davis-Bacon prevailing wage requirements that are incompatible with
requirements regarding the use ofcommunity based contractors.
■ Remove inconsistencies between State and Federal laws that restrict development oflow
to moderate-income housing in California. For example,in rehabilitation program
standards. NEPA(Federal)requires referral ofall construction projects to the state
office ofhistoric preservatiotL State Law(CEQA)only requires such referral when the
property or any existing structure appears on local, state or Federal historic registers.
The extra time(minimum of30 days)and the amount ofunnecessary paper work
involved in referring properties with no historical value to the state ofGce of historic
preservation, creates uimecessary delays in projects and increases overall cost, thus
decreases the aflfordabiUty ofthe units being considered.
58
■ Recognize that Federalprocurement standards conflict with some California County
standards and add to the cost ofnew housing units.
■ Seek assurancefrom HUD about the continuity ofSection 8. This would allow landlords
to be assured that their developments receive a stea(fy flow Ofincome.
■ Increase the percentage ofSection 8 certificate allotment that could be converted to
project-based Section 8. (Currently it is upto 15% ). County supported developments
could use project based section 8 subsidy in a project based to build more affordable
housing units.
■ Do not cap the length ofthe Section 8 subsidy in the short term. ITiis limits the ability to
use it creatively as leverage.
■
Waive,the collection ofimpactfees or developmentfees. In a recent study conducted by
the Public Policy Institute of California, the researchers foimd that fees imposed on new
construction are significant, typically falling in the range of$20,000 to $30,000 per
dwelling.^ Traditionally, cities and counties have used property taxes to finance
mfiastructure—such as roads,schools, and parks—^for residential development.In turn,
new residents, through their property taxes, would help finance inffastructure for others
in the future. Proposition 13,enacted in 1978, limits the increase in property tax that
homeowners pay. The financing ofiifiastructure for new homes in California is no
longer shared by aU property owners in a community,but is bome instead,in different
degrees, by developers and new home bikers. Ifstate funds are not used,local
governments have only two alternatives: bonds or exactions^ Exactions are payments
made by a developer to local governments for the right to proceed with a project.
Exactions can include development fees, the dedication of public land,the construction
59
or maintenance of public infrastructure, or the provision of public services. Lnpact fees,
raise the cost of building a home. Developers then tend to focus on building expensive
homes in order to be able to recoup the development fees.^^ During times of economic
boom,such as now, counties are flush with property tax revenue that results from resale
of property. Counties can allocate this revenue for infrastructure development so that
the use of development fees can be minimized.
Providefinancingfor the construction ofnew schools
Until the mid-1980s,only
cities and counties could impose development fees,including school fees.In 1986,the
legislature authorized school districts to impose their own fees on new construction.
Although school fees were capped,based on the square footage ofthe new development,
subsequent court decisions have ruled that the fee limits apply only to fees levied by
school districts and not to those imposed by cities and counties. This leads to the
possibility that some communities will increase their use of development fees, which in
many cases are already substantial. Cities and coimties will continue to rely on
development fees and exactions unless some other source offunding is provided,
especially for the construction ofschools. Financing mechanisms that could be
harnessed to distribute the burden across the public include state general fund subsidies,
as well as state and local general obligation bonds.
Try to reduce the widening gap between rich andpoor in California. According to a
recent study conducted by Public Policy Institute of California, the widening gap
between the rich and poor in California results from not only from rising income among
those in the higher income levels, but also from a substantial decline in income among
those in the mid to lowest levels ofincome distribution.^^ In 1969, a native male with a
60
Bachelor's degree earned 48% more than that earned by a worker without a bachelor's'
degree. In 1997,the retum to a Bachelor's degree was to 69%^gher. Figure 8 below
shows that the retums to experience have also grown over the past 30 years. In 1969,a
native worker with 25 years of experience earned 68% more than native worker with 5
years of experience, and by 1997 he was earning 91% more.
Figure 8
Returns to Education and Experience for Native Males,1969 and 1997
0.8-
0.6
0.4-
0.4S
0.37
0.2
0.09
1
tOghSchoeiv.
2
BtcMoc'sv. .
llthGrede
IH1S69 ■11997]
Source: Public Policy Institute of California, Research Brief.
The study notes that a major reason for the increase in income inequahly is the
change in the retums to education. The latter results from more from falling wages for men
at the bottom of the distribution than for increases for men at the top. The more recent
phenomenon of the boom in the hi-tech sector and shortage of computer programmers have
caused wages of skilled workers to increase phenomenally and further widen this gap.
One major factor in California, in contrast to the rest of the nation, responsible for
the rising jnepme inequality is that the proportion of immigrants in the State's workforce has
grown considerably and this has been concentrated at the bottom and lower-middle of the
income distribution.
61
Income inequality can be attributed to the sharp faU in the wages of workers(Reed,
et. al) with a high school diploma and less. Public policy should increase public awareness
ofthe importance of a good K-12 education followed by entry into college. There is also a
need to enhance computer related skills in today's hi-tech world. This can be done at
community colleges and IT centers.
Betts notes that California does not have a geographically homogeneous market.
Among the areas with the largest spread in earnings between workers with a high school
diploma and workers with other education levels were the Los Angeles, Orange County,and
the Central Valley Regions.
An important policy concem is the low educational attainment ofimmigrants living
in California. The study done by Betts at the Public Policy Institute of California notes that
about three fourths ofimmigrants in California have permanently ended their schooling
before entering the US. Legislation should focus on offering training programs that can
help adult immigrants who have not graduated form high school.
■ Enact legislation tofavor the retention ofskilled workers in California. It is important
that California continue to attract skilled workers. About half ofthe State's college
educated workers come j&om other states and counties(Betts,2000). The State needs
to undertake policies to ensure that California can continue to attract students and skill
from elsewhere. Some ofthe State's universities face high costs of housing. A recent
article in.the Orange County Re^ster on November 25,2000 noted that Stanford
officials worry that ifthe campus cannot expand some ofthe universities 14,000 students
and 1,640 faculty will be priced out ofthe area. The current housing crunch in the
Silicon Valley area is adding pressure on them to expand into the hillside. The
62
university wants to build more than 3,000 additional low cost housing units on campus'
in the next decades to ease the strain on students and staff. They are at a competitive
disadvantage with their peer schools because people cannot afford the rents in Palo Alto.
A Santa Clara Coimly supervisor wants them to remain undeveloped for the next 99
(
years. Environmentalists are demanding permanent protection of1,000 acres of green
land,home to the threatened tiger salamander. This issue is currently under
consideration by Santa Clara County.
Reduce litigation and regulations that especially affect the construction ofmulti-family
housing.
Encourage theformation ofhousing trustfunds similar to what exists in Silicon Valley.
Housing TrustFunds can act as catalysts and promote comprehensive regional solutions
in a coordinated framework.
Work to increase the Federal government's commitment to housing assistance. A recent
report. Raising the Roof, extrapolates fiiture affordable housing needs. According to this
report,,the number oflow-income households needing some form ofhousing assistance
could increase by 1.3 million by 2020 if,the number ofCalifornia households grows to
16.2 million by 2020, and ifthe current percentage of households who are both lowincome and are over-paying for housing remains constant Ifthere is no corresponding
increase in housing assistance levels,total unmet affordable housing needs in the State
will rise to about 3.7 million units in 2020. The report notes that affordable housing
needs track with rents. So,a slowdown in rental housing production will cause rents
and therefore affordable housing needs to rise. In light ofthese findings and the findings
ofthe California's Budget Project, it appears that a renewed Federal commitment to
\
63
affordable housing including additional financial support is essential to solving
California's housing crisis.
■
Generate increased State supportfor housing affordability. California's affordable
housing crisis cannot be addressed without an increased commitment ofpublic resomces
firom the State. Potential sources of State support include: continued support through the
annual budget; using one time moneys to endow the State's housing trust fund and other
housing trust funds in crisis areas; and placing an affordable housing bond measure
before State voters.
Conclusion
Since public funding either at the Federal level or at the State level is generally
scarce and has several competing uses, policy measures should first focus on the other
solutions that are outlined above and are geared towards:
■ easii® regulation,
■ providing more opportunity for localjurisdictions to act in a coordinated maimer,
■
allowing jurisdictions to leverage scarce financial resources more effectively,
■ removing distortions in California tax policies that encourage commercial use as
opposed to residential use, and
■ diminishing the wage gap between skilled and unskilled workers.
Given the scarcity ofdevelopable land in key metropolitan areas, and the general scarcity of
funds for affordable housing, the measures discussed in the report can help alleviate the lowincome housing crisis, without having to divert resources fix>m middle-income affordability.
64
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and services
are located together, and are all linked by transit and other alternatives to driving alone.
37% of New Housing, 32% of New Jobs Are Located Near Transit'
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
stations and major bus corridors reinforces the creation of
compact, walkable communities linked by transit. This helps
to reduce traffic congestion on Silicon Valley freeways.
50% ■
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that 37% of all new
housing units approved in 2000 were located within one-quarter
mile of a rail station or major bus corridor. Thirty-two percent of
new commercial/industrial developments were also located within
one-quarter mile of transit, representing 15,700 potential new jobs.
40%
30% •
Approvals near transit declined from the previous year when
57% of new housing units and 35% of new jobs were located
near transit.
1998
1999
I PERCENT OF HOUSING UNITS
2000
I PERCENT OF JOBS
NEAR TRANSIT
NEAR TRANSIT
Source: Valley Transportation Authority, Congestion Management Program;
City Planning Departments
vv
LIVABLE
V
ENVIRONMENT
m
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth iii jobs and growth in housing.
Approvals for New Housing Fall by 50%; 1,600 New "Affordable" Units Approved
WHY IS THIS IMPORTANT?
TOTAL NEW HOUSING UNITS APPROVED, INCLUDING
NEW AFFORDABLE HOUSING UNITS, SILICON VALLEY
Our economy and community life depend on a broad range of
jobs. Building housing that is affordable to lower- and moderateincome households provides access to opportunity and maintains
14,000 ■
balance in our communities. This indicator measures housing units
approved for development by Silicon Valley cities in each fiscal
12,000
year, this is a more "upstream" measure than actual housing starts.
10,000 •
HOW ARE WE DOING?
8,000 ■
The number of new housing units approved for development by
Silicon Valley cities fell by more than 50%,from 12,060 in fiscal
year 1999 to 5,370 in fiscal year 2000.
Despite this overall decrease, the number of new affordable
housing units approved remained around 1,600. This number
represents 31% of total net new housing units approved.
Affordable rental housing is for households making up to 60%
of the median income. These units are primarily developed by
nonprofit housing developers or units set aside as "affordable"
in market-rate developments.
6,000 ■
4,000 ■
2,000 ■
1998
1999
I NEW HOUSING U.NITS
Source: City Planning Departments
2000
I AFFORDABLE UNITS
Only 16% of Houses Are Affordable to Median-Income Households;
Rents at Turnover Rise 26% in 2000
WHY IS THIS IMPORTANT?
The affordability, variety and location of housing affect a region's
ability to maintain a viable economy and high quality of life. Lack
of affordable housing in a region encourages longer commutes,
which diminish productivity, curtail family time and increase traffic
congestion. Lack of affordable housing also restricts the ability of
PERCENT OF HOUSES AFFORDABLE TO MEDIAN-INCOME HOUSEHOLDS
70%
60%
50%
service workers — such as teachers, registered nurses and police
officers — to live in the communities in which they work.
HOW ARE WE DOING?
In 2000, 16% of Santa Clara County houses were affordable for
households with the median income, a significant decrease from
31% in 1999. This number contrasts with the national average of
60%. Despite rising home prices, Silicon Valley's hoirie ownership
rate of about 60% mirrors the national average for metropolitan
areas. Between 1987 and 1999, home ownership rates have ranged
from a low of55% in 1987 to a high of64% in 1998.
In 2000, average apartment rental rates at turnover increased by 26%
in real dollars compared to a 2% increase in median income. The
average monthly rent was $1,687 for all types of units. Occupancy
rates are at 98.7%, up from 97% in 1999.
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
I SANTA CLARA COUNTY
Source: NAHB, Department of Housing and Urban Development
INCREASE IN APARTMENT RENTS AT TURNOVER COMPARED
TO INCREASE IN MEDIAN HOUSEHOLD INCOME
1.75
1.50
1.25
1.00
To live in aii average one-bedroom apartment in Silicon Valley,
a preschool teacher would have to set aside 80% of his or her
monthly salary for rent payments. Rent would take up 30% to
38% of monthly pay for public school teachers, police officers
and'nurses earning average salaries.
.50
.25
1991
1992
1993
1994
1995
■■1 AVERAGE RENT
1996
1997
1998
1999
2000
■■ MEDIAN INCOME
Source: NAHB. RealFacts, HUD
PERCENT OF MONTHLY INCOME TO PAY MEDIAN RENT
Pr^chool
Teacher
±=l=t
Public School
Registered Nurse
Police Officer
Teacher
Source: RealFacts. Center for Child Care Workforce, California Nurse's Association, California
Teacher's Association, Silicon Valley Police and Sheriff Departments '
REGIONAL
TREND
INDICATORS
Slight Increase in Engineering Graduates from Local Universities
WHY IS THIS IMPORTANT?
ENGINEERING DEGREES AWARDED BY
Access to talent is a top factor influencing business location deci
sions (see Joint Venture's Internet Cluster Analysis^ 1999.) This
indicator shows the potential local pool of engineering talent for
technology-based industries,
UNIVERSITIES SERVING SILICON VALLEY
4.500
4,000
3.500
HOW ARE WE DOING?
3,000
The total number of engineering degrees awarded from local
universities increased slightly in 1998,from 3,807 to 3,998, Driving
2,500
this increase was a jump in Masters degrees awarded from 1,621
to 1,935, nearly matching the 1994 high.
2,000
1,500
The total number of engineering degrees awarded annually from
local universities has decreased 8% from the 1994 high, compared
to a 3% decline nationally during the same period.
LOOO
500
1991
1992
1993
1994
■■ bachelor's
1995
1996
1997
1998
■ DOCTORATES
mm ma!
In 1998, the greatest numbers of degrees were awarded in
computer engineering and electrical engineering, 977 and 881
respectively.
The greatest shift at local schools has been away from electrical
engineering degrees (which have declined 21% since 1987) to
computer engineering degrees (which have grown 81% since
1987). Asian American students earn 48% of all BS engineering,
degrees awarded by Silicon Valley engineering programs. Whites
earn 37% and Hispanics 6%,
Source: American Association of Engineering Societies
Housing Affordability Declines Slightly; Rental Rates Rise Slowly
WHY IS THIS IMPORTANT?
PERCENTAGE OF HOUSES AFFORDABLE FOR
MEDIAN-INCOME.HOUSEHOLDS
y
The affordability, variety and location of housing affect a region's
ability to maintaiii a viable economy and high quality of life. Lack
of affordable housing in a region encourages longer commutes,
which diminish productivity, curtail family time and increase
traffic congestion. Lack of affordable rental housing can cause
unsafe occupancy levels and household stress,
70%
60%
50%
40%
30%
20%
HOW ARE WE DOING?
10%
In 1999, 37,6% of Santa Clara County houses were affordable for
0%
1991
1992
1993
1994
1995
1998
1996
^m SANTA CLARA COUNTY
1999
■
INCREASE IN APARTMENT RENTAL RATES COMPARED TO INCREASE
IN MEDIAN HOUSEHOLD INCOME, SANTA CLARA COUNTY
160
140
The decline is due to slightly higher interest rates, a slowdown
in median income growth and an increase in the median home
price of 14% in 1999 to $346,000,
In 1999, average apanment rental rates increased by 4% compared
120
to a 7%.increase in median income. The average monthly rent
100
was $1,357, Occupancy rates are at 97%, up from 96% in 1998,
1991
1992
1993
1994
AVERAGE RENT
I
1995
1996
1997
1998
1999*
I MEDIAN HOUSEHOLD INCOME
Sources: National Association of Home Builders, Realfacis, Department of Housing and Urban Development
^Estimate
households with a median income, down from 38,3% in 1998.
This number contrasts with the national average of 68,3%-
INNOVATIVE
ECONOMY
GOAL 3: BROADENED PROSPERITY Our econoniic growth results in a higher standard of living for lower-income people.
Income of Poorest Households Increases Slightly, but Remains Below 1992 Level
WHY IS THIS IMPORTANT?
HOUSEHOLD INCOMES OF SANTA CLARA COUNTY RESIDENTS,
ADJUSTED TO REPRESENT A HOUSEHOLD OF FOUR, 1998 DOLLARS
This progress measure looks at change in household income at
the top 20% and bottom 20% of the income distribution. House
hold income includes income from wages, investments. Social
Security and welfare payments for all people in the household.
$140,000 $120,000 -
Though the data presented are the best available at the regional
level, data are derived from an annual sample of as few as 200
$100,000 -
households. Thus, these data are more useful for tracking longterm trends rather than specific year-to-year movements.
$80,000 -
The indicator compares income available to a representative
household at identical points in the distribution over different
periods of time (the 80th percentile, the 20th percentile). In
fact, over time, specific households and individuals move up and
down the distribution. Data on this "mobility" is in the process
of being developed at the regional level.
$60,000 $40,000 ■
$20,000 ■
$0 ■
1992
1994
1996
1998
HOW ARE WE DOING?
1 80TH PERCENTILE
Source; Census Bureau
I 20TH PERCENTILE
After remaining at approximately $34,000 during the start of the
economic boom (1994—96), inflation-adjusted income of repre
sentative households at the lowest 20th percentile of the income
distribution has started to rise. Between 1996 and 1998, their
household income rose approximately 7.5%. However, the 1998
level of$36,700 remains below the income level earned by the
bottom 20% of households in the early 1990s.
The increase in the lowest 20th percentile follows a national
trend where tight labor markets are increasing average wages.
Between 1996 and 1998, inflation-adjusted income of representa
tive households at the 80th percentile increased 28.4%.
LIVABLE
ENVIRONMENT
®« livable COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
stations and major bus corridors reinforces the creation of compact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
60% •
50% ■
HOW ARE WE DOING?
40% •
Silicon Valley cities are approving more residential and commercial/
30% ■
corridors.
industrial development near rail stations and along major bus
In 1999,57% of all new housing units approved by Valley cities
were on property within one-quarter mile of a rail station or major
bus corridor. Thirty-five percent of new commercial/industrial
Percent of New Housing Units
Near Transit
Percent of New Jobs
• Near Transit
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit
Sources; Center for Urban Analysis, Congestion Management Frograni/VTA,
City Planning Departments
GOAL 9: housing choices We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
WHY IS THIS IMPORTANT?
Our economy and community life depend on a broad range of
jobs. Building housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
14,000 -
in our communities.
12,000 HOW ARE WE DOING?
10,000 -
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
. 8,000 6,000 -
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
the 10,600 units approved were affordable.
4,000 -
2,000 -
0-
1998
I NEW HOUSING UNITS
1999
I AFFORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households on the Santa Clara County Housing Authority's
waiting list for affordable housing.
E V E R Y O N E'S
VALLEY
Affordable Housing:
Definitions & Terminology
Baseline:
Affordable Housing Needs in
Silicon Valley
To determine the need for affordable housing,
the population of a geographic area is often
divided into the following categories based on
8hortaqe ofAffordable Units
According to the:1990 Censusi, over 53,000
household income in relation to the median
:familiesT- full, one-fifth of San Jose house-
income fcr that region.
holds-are considered ELI or VLI, indicating
a major need for affordable housing.
• Moderate-income (M): 80-120%of the
V
• Low-income (LI): 50-80%of the median
• Very low-income (VLI) 30-50%of the median.
• Extremely low-income (ELI): 0-30%of the
Census data indicate the.following specific
shortfalls:
ELI
-16,538
VLI
- 9.411
In Silicon Valley" the median income for the
LI
+ 8,988
Vear 200n is S87 000 Applying the income
TOTAL
-16,961
categories to this median provides the
following ranges
■During;the:last:decade, growth in the gap
between housing costs and income has
dramatically increased. Therefore, the
shortage of ELIiand: VLI units in the 2000 census should: be substantially higher.
•M: S69.600-S104,400
•LI: S43.500 -S59.600
•VLI:326100-S43 500
•ELI:SO - $26100
In fact. The City of San Jose's: own precensus:caleulations:also;indicate that from ^
"Affordable" housing is commonly defined
as housing that costs no more than 30
:1999-2006j.the:need for affordable: units will:
percent of grcss housenold income
continuetorise^:
ELI and VLI units
5,113
2,345
Total additional 1999-2006 7,458
LI units
* 'Silicon Valley" is often synonymous with Santa Clara
County, in this case, however,the median income
figure refers to Santa Clara County and parts of San
San Jose's Total need, 1999-2006:
24,419 affordable units
Mateo, Santa Cruz, and Alameda Counties
WORKING PARTNERSHIPS USA
Policy Brlers:Sllicon Valley Equity Series
8
Creating;New Hbiislng:Option t
Inclusionary zoning ordinances often include a
variety of components,to assist developers in
indusionary Zoning
meeting its reqtiirements. Amunber ofthese are
listed below;
Density bonuses
Inclusionary zoning ensures that a portion ofthe
region's housing production is dedicated to cre
ating affordable units. Essentially, inclusionary
zoning ordinances,or below market rate(BMR)
programs,use municipal authority over land use
This practice allows builders to achieve den
sities higherthan normally accepted in a resi
dential zone. For example, the City of
Sunnyvale allows developers to apply for a
15 percent density "bonus" if they provide
units below market rate. One recently ap
to require developers to dedicate a percentage
proved project on Maiy Ave. in Sunnjrvale
of units for moderate-, low-, very low-, or ex
expanded from 28 to 32 units as a result ofa
tremely low-income families.
density bonus^". The sale or rental ofthese
"extra" units can help offset the cost to de
In practice, these measures set an "inclusionary
requirement" often ranging between 10 and 30
percentfor each development. Some ordinances
allow developers to pay an "in-lieu" fee into an
affordable housing fund as an alternative to ac
tually building below market rate units.
lowed to move through the city's planning
Cities can create mixed-income communities in
and review process at an accelerated rate,
thereby reducing the holding costs to the
a variety of settings by applying inclusionary
zoning to developments ofsingle family homes
and condominiums, as well as apartment com
velopers of marketing some units at belpw
market-rates'^
Fast track
Projects with below market rate units are al
developer. For example, Monterey County
offers an accelerated review process to
builders who set aside 25 percent of new
plexes. Although most ordinances require de
velopers to meet the inclusionary requirement
units as affordable^'.
only on projects greater than 10 or 20 units,some
restrict inclusionary zoning to larger projects of
Fee waivers
50 units or more. In order to capitalize on the
units, fees normally assigned to develop
ments may be reduced or waived entirely.
As an incentive to develop below marketrate
potential for affordable units in large projects,
cities may apply inclusionary zoning to units
built on large,so-called "in-fill" sites(vacant or
For example, although the City ofSan Jose
underutilized land in urbanized areas) and land
dinance,it does waive a number ofconstmc-
reserves!
tion fees,park fund dues and other taxes for
has not enacted an inclusionary zoning or
affordable housing projects.
New Housing
Options
WORKING PARTNERSHIPS I
#
EVERYONE'S
VALLEY
Design flexibility
single and multifamily developments of five
Inclusionary zoning programs may allow a units or more to be affordable. Since the adop
builder greater flexibility in regard to de
tion ofthe ordinance, 1,400 affordable units have
sign requirements,such as length ofsetbacks
or parking spaces required per imit. For
ex^ple,in Montgomery County,Md.,flex
ibility may derive from reduced closet space,
unfinished basements, cheaper materials,
and off-curb-parking in lieu ofcovered ga
been created for low-, very-low^ and moderateincome families. Petaluma's program offers
developers four options: they can produce af
fordable units; provide land for developing the
units; pay an in-lieu fee; or present an "innova
tive idea"for some other form ofcontribution.^^
rages for affordable units.
Another example of a successfiil inclusionary
"Inclusionary
zoning is in
widespread use
in California. By
1994,64 cities
Direct subsidies
zoning program can be found in Montgomery
As an added incentive to produce affordable
housing,cities may provide direct payments
for infrastructure, affordable housing grants
or financing at reduced rates. They may also
assist developers to secure funds from ap
plicable state programs.
County, Md. near Washington, B.C. In 1974,
county officials enacted a 15 percent
inclusionary requirement. In 25 years since, the
program generated over 10,500 units ofafford
able homes,townhouses and apartments for sale
and rental. The qualifying household income
ranges from $16,000 to $40,000.
and counties in
the state had
Inclusionary zoning is in widespread iise in Cali
adopted some
fornia. By 1994, 64 cities and counties in the The county's housing commission owns many
state had adopted some form ofit. To date,these of the homes rented to extremely low-income
form of it."
efforts have produced more than 23,000 new, families. These houses were sold to the housing
affordable units statewide.
commission by the developer at cost (roughly
one halfofsale price). Land cost is notincluded
One example ofa successfiil program is in Irvine, in these cost calculations due to a 15 percent
which enacted a25 percent inclusionary require density bonus offered to the developer. To se
ment in 1984.In the first ten years, the program cure subsidies for these homes, Montgomery
generated a total ofapproximately 3,000 afford County often takes advantage of low income
able units. Since 1994, the City of Irvine has housing tax credits, as well as state and county
lowered its inclusionary goal to 15 percent mid bonds. While there are no construction subsi
generated 390 additional new housing units for dies provided to apartment unit developers,there
very low-income families. Because some afford are ongoing subsidies to maintain affordability
able imits have been converted to market rate requirements on apartments in the form ofprop
units, the total now approximates 3,200.?.^
erty tax relief for the affordable units. To pro
vide rental houses to extremely low-income
The inclusionary housing policy in Petaluma in households, the program leverages section 8
Sonoma County requires 10 to 15 percent ofall subsidies.^"*
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ng
Today, eight out of Silicon Valley's 14 munici
palities, including Sunnyvale, Los Gatos, Palo
Alto and Cupertino, have implemented below
TABLE 3: Improved Land costs in Mid-Coyote Valley
a)Developable acres
Total acrqs
Acres reserved
Acres reserved
Acres reserved
Total developable Developable
market rate housing programs. Sunnyvale
adopted an inclusionary zoning ordinance in
1980. It requires that ten percent of new hous
in Mid-Coyote
for drainage and
flood plain
for schools and
for streets(1)
acres
250
25
ing be built for moderate-income, LI, and VLI
Cost per acre (2) Canying costs, Total land cost
insurance, other per acre
costs per acre '
households. The program has already created
774 affordable units.*
1,700
paries
acres as %
of total
214
1,211
Totailand cost
Total
Infrastnjcture
per developable
acre (3)
Infrastructure
rfostsper
developable
71.25
b) Costs
costs
acre
40,000
40,000
80,000
.112,281
100,000,000 82,559
Total cost per developable acre w 194,840
1 ^Acres reserved for streets equals 15% of total acreage minus acres reserved for flood plain and
Inclusionary zoning can have only limited ben
efit if it is applied to jurisdictions that are close
to build-out. If only a small number ofunits re
main to be constructed in a city, then develop
ing 15 percent or even 20 percent ofthose units
as affordable housing will have only a minor
sctiools.
2. Cost per acre of land Is calculated based on average land value, as recorded by the County
Assessor, for land parcels purchased between 1990-2000.
3. Calculated by dividing 80,000/acre by 0.71 (proportion of total that Is developable), thereby
passing on'land costs to the developable parcels,
4.Total land cost per acre plus total Infrastructure cost per acre.
TABLE 4: Cost per 2 bedroom,2 bath condominium unit
impact. However, the possibility exists of ap
plying inclusionary zoning to San Jose's MidCoyote Urban Reserve. City officials beheve that
the Mid-Coyote Valley has the capacity to be
Mid-Coyote: 100 units on 4.5
infiii: 100 units on 2
acres; 25 units per acre;'
acres; 50 units per acre;
beiow-ground parking
on-grade parking (0.5 acre)
Size in square feet
improved iand cost(1)
On-site improvement(2)
come an "urban village" of25,000 households.
Hard construction costs (3)
IfSan Jose adopted an inclusionary requirement
of20 percent, that urban reserve could generate
5,000 much-needed affordable housing units.
Public fees
Soft costs (4)
Contingency fund (S)
Reserves (6)
1,150
$8,768
$16,500
$138,000
$20,000
$20,700
$5,750
$6,900
Developers fees and
construction management(7) $59,400
$276,018
$330,000
$53,982
Total cost
Sale price
1,150
$22,000
$17,500
$157,550
$20,000
$23,633
$5,750
$6,900
$63,000
$316,333
$350,000
$33,668
Profit
1. Improved land cost refers to land cast plus some fatflor for infrastructure costs. See Table 3for
calculations.
2. On-site improvements are estimated as 5% of the sales price.
3. Hard construction costs are estimated to be $120/sq.ft for Mid-Coyote.
They are $137/sq.ft. for infill units, due to the greater costs of underground parking and higher multi
story construction.
4.Assumed to equal 15% of hard costs. Soft costs include architectural, engineering, contractor and
developer overhead,financing, and sales/marketing costs.
5. Contingency funds are $5.0/sq.ft.
6. Reserves are $6.0 sq.ft.
7. Developers fees and construction management are 18% of the sales price; development fees are
15%,constnrction management is 3%.
'
578 rental, 196 ownership.
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example, in the Mid-Coyote Valley the resources
Evaluation
per unit provided by either private or public
Public Costs
sources needed to produce an apartment afford
With the exception of administrative expenses,
inclusionary zoning ordinances do not require
city expenditures. However,poHcymakers could
choose to assist developers in meeting the
ordinance's requirements. Such public expendi
able to an ELI household are $179,946 (see Table
10 ). If the City of San Jose elected to use RDA
resources to subsidize 50 percent of those costs
and the program produced 1,677 ELI units, then
tures can be justified if an inclusionary zoning
policy attempts to reach extremely low-income
households.For example,the City ofSan Jose's
current pohcy offee waivers for affordable hous
ing projects ihight result in lost revenue of ap
proximately $1,000,000 for a 100-unit afford
able apartment project. A city can also directly
subsidize units as part ofan inclusionary zoning
program with redevelopment or other funds. For
$149,984,991.
1
TABLE 5: Condo affordability gap per unit
1 a) MId-Covote
50%
27,356
93,341
over 30 years (1)
Down payment(2)
16,500.
Total owner contribution 43,856
Total development cost o) 276,018
Gap
-232,162
109,841
276,018
■166,177
16,500
207,841
276,018
■68,177
b) Infill
I
■
Affordable mortgage
50%
(ELI upper-bound)
27,356
over 30 years (4)
Down payment (S)
17,500
44,856
Total development cost (6) 316,333
Gap
■271,477
Total owner contribution
m
'
sorb costs associated with the generation of
specified numbers and types of affordable units.
While the details of individual projects will al
ways vary. Tables 8 and 11 illustrate in general
the costs associated with a 20 percent
tables also indicate how these costs wiU vary
depending on the mix of income levels the pro
gram is designed to benefit.* Examples for an
in-fill project and for a project in the Mid-Coy
1
30%
inclusionary zoning requires developers to ab
two-bedroom condominium complex. The
191,341
■
16,500
Independent of any public incentives offered,
two-bedroom apartment complex and a 100 unit,
80%
(ELI upper-bound) (VLI upper-bound) (LI upper-bound)
Affordable mortgage
Private Costs
inclusionary zoning requirement for a ICQ unit,
I
30%
the cost to the RDA program would be
ote Urban reserve are included. Tables 6,7, and'
(VLI upper-bound)
80%
(LI upper-bound)
8 illustrate that developers can expect a healthy
93,341
191,341
return on their cash investment.
17,500
110,841
316,333
■205,492
17,500
208,841
316,333
■107,492
Scale
^
When inclusionary zoning policies apply to in
fill sites, they are often limited to larger projects
1 Assumes 7.0% interest rate.
2 Down payment Is 5% of market rate sale price of $330,000.
3 See Table 4 for calculation of development cost Total development cost equals constnjctlon costs
plus developer fees and constniction management
of 50 units or more. Based on this criterion, the
4 Assumes 7.0% Interest rate.
would generate nearly 3,000 units in San Jose
adoption of inclusionary zoning for in-fill sites
5 Down payment Is 5% of market rate sale price of $350,000.
6 See Table 4 for calculation of development cost
1
j
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[20
* See Tables 5 and 10 for calculations of the capital gap per unit.
and 660 in Santa Clara,the two major cities that
currently lack inclusionary zoning programs.^^
TABLE 6: Cash on cash analysis per market rate unit m
Developer's Expend itures
for affordable housing from its Redevelopment
Agency. The Fair Share Housing Inventory in
8,768
On-slte improvements 16,500
25% of all other costs 62,688
87,956
Sub-total
5,459
Carrying costs of
construction loan (2)
1998 indicates that between 1988 and 1998,
Total
The City of Milpitas receives substantial funds
Amount of Construction Loan
Total development
276,018
Improved land cost
costs
Subtotal of developer's 87,956
expenditures
Construction loan $188,063
$93,414
Milpitas produced affordable units that satisfied
24% ofVLI need and 59% of LI need. These
efforts leave room for significantly increasing
the production of affordable units.-^ The city
should assess available vacant land and current
need to evaluate inclusionary zoning as one strat
egy for generating affordable housing.
Developer's Return
330,000
188,063
Sale price
Construction loan
(Sale price construction loan)
141,938
Total developer
93,414
expenditures
1 Cash on cash return 52%
j
1 Cash on cash analysis compares the cash return against the developer's cash expenditures.
2 Carrying costs equal 2% of the borrowed amount plus 9.5% interest over two years.
As noted, if the San Jose Urban Reserve is de
veloped as a higher density "urban village," it
may include as many as 25,000 units. As a re
sult, a 20 percent inclusionary zoning require^
ment would thereby generate 5,000 affordable
units. If the inclusionary zoning policy divided
those units equally amongst ELI, VLI, and LI
households, the majority of those units would
TABLE 7; Cash on cash analysis
per 100 unit complex in Mid-Coyote
180 units at market rate, 20 units at VLI
|
Revenue to developer after
paying off construction loan
11,452,370
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
23%
necessarily be apartments or condominiums.
80 units at market rate, 10 units at VLI
Longevity of Benefits
Inclusionary zoning measures may require deed
restrictions that assure continuing affordability
for 20 to 30 years or on a permanent basis. For
example, Palo Alto's program preserves the
affordability of an ownership unit for 59 years.
If, during that time, the property is sold, the
affordability is extended for another 59 years.
Ifthe occupant sells the property after 59 years,
affordability is not preserved.
and 10 units at LI
Revenue to developer after
paying off construction loan
11,942,370
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
28%
1
80 units at market rate, 20 units at LI|
Revenue to developer after
12,432,370
paying off construction loan
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
33%
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7
1
TABLE 8: Condo capital gap vs. developer profit
Inclusionary zoning policies may target any in
for 100 unit complex
a) Mid-Coyote
ELI
YLl
come level. For example. Table 12 describes a
Li
-68,177
Capital gap (1)
-232,162
-166,177
Profit per market rate unit $53,982
80 Market rate, 80 Market rate, 10 LI
20 VLI
iO.VLI,
Net profit for 100-unit complex $2,656,790
$3,146,790
Benefit to ELI and VLI Residents
plan for Mid-Coyote that would produce 1,667
ELI, 1,666 VLI, arid 1,667 LI units. However,
1
econoniic analysis will indicate those levels at
which it is unreasonable to expect developers to
assuming the developer pays for
half the capital gap
absorb the fiill costs ofthe affordable units and
still maintain profitability.As Table 12 indicates,
Profit on sales (2)
8.3%
9.9%
b) Infill
ELI
-266,677
VLI ,
-200,892
construction of affordable imits will require
Capital gap (3)
Profit per market rate unit $33,668
80 Market rate.
Li
-102,892
packages including significant incentives and
external subsidies as well as developer contri
butions.*
20 LI
Net profit for 100-unil complex $1,664,520
Leveraging Other Resources
assuming the developer pays for
half the capital gap
Profit on sales
5.2%
1 Capital gap is calculated in Table 5.
.
2 Refers to the profit in relation to the sale price, not the investment.
For the VLI and LI units, development cost is used instead of sales price.
3 Capital gap is calculated in Table 5..
In order to offset the costs ofbuilding and main
taining affordable units,inclusionary zoning may
be combined with a wide variety of other pro
grams.Included among them are the following:
1
Section 8:
TABLE 9: Apartment capital cost per 2 bedroom,2 bath unit
ICQ units, 35 units/acre.
100 units, 50 units/acre.
Families that receive Section 8 vouchers or
4.5 acres, pn-grade parking
(0.5 acre)
2 acres, below-ground
certificates can be offered access to units
Size in square feet:
Improved land cost(i)
Hard construction costs (2)
1,150
$8,768
$138,000
1,150
$22,000
Public fees
Contingency fund (4)
On-site improvement(S)
$20,000
$20,700
$5,750
$9,661
$157,550
$20,000
$23,633
$5,750
$10,711
Total cost
$202,879
$239,643
Soft costs (3)
parking (INFILL.)
constructed through an inclusionary zoning
program. Some vouchers may be attached
to specific affordable units created through
inclusionary zoning,thereby assuring that a
federal subsidy wUI be continuously avail
able to the apartment complex.
1 See Table 3for caiculation of improved lahd cost.
2 Hard construction costs are estimated to be $120/sq.fL in Mid-Coyote.
For infill units, hard constiuction costs are $137/sq.fL due to underground parking and costs
associated with higher multi-story construction.
3Assumed to equal 15% of hard costs. Soft costs include architectural, engineering, contractor
and developer overhead,financing, and sales/marketing costs.
4 Contingency funds are $5.0/sq.fL
Low Income Housing Tax Credit
(LIHTC)2«:
The federal government provides states with
a credit of$1.25 per capita. This money is
earmarked for projects withj20 percent
5 On-site improvements are estimated as 5%,of all other costs.
1
* The income figure of $69,600 refers to 80 percent of median income,
which includes all three affordable housing categories under scrutiny.
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affordability of VLI or below. While there
■ '
i
may be competition among programs within
TABLE 10: Apartment capital cost vs. supportable
debt
CO
the state, non-profit developers in the Bay
Per unit monthly costs
Gross Operating Income
Area have won at least 16.5 milhon dollars
(Monthly rent)
in federal credits in the last two years.^^
These credits, while often unused by for-
Utility
Vacancy allowance
'
ss, 1
CO
Market rate 1 (1) Market rate II
p
ELI
VLI
653 .
1,088
2,200
2,500
33
54
110
125
545
1,034
2,090
2,375
75
(5% of GO!)
Effective Operating Income
profit developers, exist as an incentive for
(EC!)
those that choose to build affordable units.
1
Operating expenses
333
333
($4000/year per unit)
Net operating income (NOi)
Debt service (noi/i.2)
State of California:
i
Recognizing the high cost of developing
housing in California,the legislature autho
rized a state low-income housing tax credit
program to augment the federal tax credit
program. The state credit is only available
to projects which previously received,or are
Currently receiving, federal tax credits.^®
Bay Area non- profit developers have won
700
1,757
2,042
177
584
1,464
1,701
27
52
105
119
65
188
222
m
i
Reserves(5% of EC!)
1
Net cash flow
.
8.
Capital gap per unit - Mid-Coyote
Supportable debt
ELi
VLI
Market Rate
22,933 ,
75,666
189,682
202.879
-127,213
202.879
-13,197
ELi
VLi
Market Rate
75,666
220,389
(assumes 8.0% interest rate,
25 year loan period)
Development cost per unit la 202.879
-179,946
Capital gap per,unit
Capital gap per unit - iiifiii
at least 12.7 million dollars in state credits
Supportable debt 22,933
in the last two years.
(assumes 8.0% Interest rate,
25 year Ipan period)'
CO
CO
$239,643
Development cost per unit (s) $239,643 $239,643
CO
-216,710 -163,977 -19,254
Capital gap per unit
In addition to California's LIHTC program,
California voters have,in the past,approved
1 Market rate 1 refers to apartments In Mid-Coyote; Market rate II refers to apartments downtown or
general obligation bonds for low-income
In other Infill sites.
housing development. Thotigh approv^ is
3 Calculated In Table 9.
2 Calculated In Table 9.
Note: No LI apartments are proposed for Mid-Coyote or Infill sites. All LI units proposed are
unlikely duripg the present electricity cri
sis, those measures could receive a favor
212
condominiums.
1
able response from voters in the future. The
^California DepartmentofHousing and Com
munity Development also operates a $60
million multi-family rental and transitional
housing program, which could be accessed
for affordable housing in Silicon Valley.
subsidies for below market rate hbusing.
While much ofthat money is earmarked for
current programs,additional funding niay be
available as tax increment levels increase to
subsidize part ofthe cost ofaffordable hous
ing. Together with state bonds, these funds
RDA:
As previously noted,state law requires that
20 percent ofRDA funds be used to provide
could be dir^ct^to the housing most diffi
cult to subsidizesiWts at affordability of30
percent ofn^diaf,or ELI.
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Housing Trust of Santa Clara County;
HTSCC has dedicated one third of its re
TABLE 12: Total resources needed
sources to help finance affordable units in
for 5,000 affordable units In Mid-Coyote
Units
Total capital gap
San Jose. Given the large subsidies these
units require, the HTSCC's program ofgap
financing can fill the "holes"-between afGsrdable rents and development costs that other
subsidies may not completely cover.
1
1667 Li condominiums
$299,969,982
$105,968,429
$138,425,441
$113,651,059
Total resources
$658,014,911
m
1667 ELI apartments
833 VLI apartments
833 VLI condominiums
SlBiiig
TABLE 11: Capital gap per 100-unlt apartment complex
Feasibility
Mid-Coyote
As noted, inclusionary zoning programs have
20 ELI units,
10 ELI, 10 VLI,
80 market rate
80 market rate
Capital gap for complex
4,654,680
Present value of cash flow from rents (i) 10,787,498
Present value of sale price of complex 17,351,048
4,127,350
10,939,548
17,664,936
after 25 years (2)
Annual rate of return
13.27%
13.89%
Infill
20 ELI units,
10 ELI, 10 VLI,
80 market rate
80 market rate
Capital gap for complex
-5,874,520
11,748,023
19,992,251
-5,347,190
12,248,081
20,306,139
12.76%
13.30%
been adopted in over 60jurisdictions in Califor
nia and eight in Silicon Valley. The strategy has
a proven track record, and a number of model
ordinances are available for review and/or modi
fication.
Present value of casti flow from rents i
Present value of sale price of complex
after 25 years i4)
Annual rate of return
1 From separate cash flow chart, not shown.
2 Sale price of complex Is the net operating Income In year 25, divided by a capital rate of 8%..
The capital rate for a complex ranges from 6.5% to 8%;the latter produces more conservative
results.
3 From separate cash flow chart, not shown.
4 Sale price of complex Is the net operating Income in year 25, divided by a capital rate of 8%..
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Creating New Housing
half the capital gap for 20 VLI units in a 100
unit complex was subsidized with tax credits and
the other half with developers' profits, 20 units
impleineriting indusiooary
Zoning
could be offered to VLI families with the devel
oper still earning 8.3% profit on sales.**
Mid-Coyote Valley
Given that the urban reserve is undeveloped,
developers can be offered greater flexibility in
Inclusionary zoning in Mid-Coyote offers the
opportunity to achieve much larger numbers of
affordable units than virtually any other feasible
strategy. Assuming build-out is 25,000 units, a
20 percent requirement equally distributed
amongst income categories would generate
design and density to offset some ofthe costs of
the affordable units. If density bonuses may not
be of value in the region (because of the initial
high densities planned for the area), another in
centive may be to hnk the inclusionaiy require
ment for VLI or ELI famiUes to the opportunity
1,667 ELI, 1,666 VLI,and 1,667 LI units.
to build single family detached housing in the
urban reserve. Single family detached housing
The relatively low land costs in the urban re would likely be included in the "urban village,"
serve will allow developers to absorb much of and the opportunity to participate in those de
the price of an inclusionary requirement. The velopments could be targeted to those who have
average cost ofland purchased since 1990 is only met the inclusionaiy requirement.
$40,000 an acre,while the cost ofresidential land
in central San Jose is approximately $1,100,000 Despite the relatively low land costs in Midan acre.* Thus, even including the substantial Coyote, it is not reasonable to expect develop
infrastructure expenses associated with opening ers to fully absorb the costs ofELI units, all of
the region to development, the land costs per which are likely to be apartments. Table 12 in
dwelling unit are $8,768 compared to $22,000 dicates that the total resources needed for 1,667
per unit in more developed areas.
ELI units will be $299,969,982. Ifthe city chose
to accept the obligation for halfthis amount, it
While land costs in the Mid-Coyote Valley are
would need to commit $150 million to the ELI
relatively low, the price of homes that can be
program.
built on that land has risen dramatically. The
results ofcombining these factors are shown in
Tables 3 and 4.Even including management and '
This excludes land purchased prior to 1990 at even iower prices. In
development fees at 18 percent of sales price,
the cost of constructing a condominium equals
$276,018. The market price of such a unit is at
least $330,000. Under this scenario a developer
would enjoy a surplus of $53,982 per unit. If
fact, between 15-20 percent of the land In Mid-Coyote Valley was
purchased over 20 years ago. 50 percent of the land was purchased in
1995 or earlier, according to County Assessor records.
"See Table 8.
This amount can be compared to unaiiocated growth in the RDA
housing program: $85,900,000 of bonded revenue from 2001-2005
growth, and, if RDA is extended, an additional $50,000,000 of the five
percent TIF from 2005-2010. Thus, almost all of the 50% subsidy
could be covered by RDA funds
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The remainder ofthe cost ofELI units would be
generated from Section 8 projects, the Califor
increasiiig The
Percentage of
nia Multi-Family Housing Program or other RDATax increment
forms of state assistance, tax credits, RTF con Allocated To
tributions and reductions in developer cash flow. Affordable Hoysing
San Jose and Santa Clara
Inclusionary zoning is more difficult to imple
ment in in-fill sites because projects must be
compatible with existing infrastructure and
neighborhood characteristics. As a result, it is
prudent to apply inclusionary zoning only on
large sites, where the potential scale of afford
able units generatedjustifies the challenge ofthis
strategy.
Redevelopment agencies are likely to remain the
primary source offunds available for affordable
housing in the region. San Jose already allocates
nearly 25 percent ofits tax increment to afford
able housing, but it could be raised to 30 per
cent. This increase is particularly important
given the city's new and much needed emphasis
on housing for extremely low-income residents.
As noted in Option 3, Subsidized Housing, a
number of other cities in the region also have
San Jose has nearly 60 sites that can accommo
redevelopment agencies, albeit much smaller
date 50 units or more.A 20 percent inclusionary than San Jose's. Increasing the housing alloca
requirement could generate 2,958 affordable tion from 20% to 30% in each of these cities
housing units. Santa Clara has eight such sites; would produce a total of$19.1 million a year in
a 20 percent requirement applied to them would tax incremerit for affordable housing.
produce 660 units. As indicated in Table 13,the
An evaluation of the extent to which the RDA
cost of this approach would approximate
allocation could be increased should be related
$540,322,560.*
to the anticipated growth of tax increment. An
increase to 30% could be siistained even if tax
The costfor developing 5,000 units in Mid-Coy- increment growth stabilized at 5% per year. If
~ ote Valley would be $650 million. When com
growth should be higher, as it has been during
bined with the $550 million, the cost of devel peak periods in the history of San Jose's RDA,
oping 3,600 units in infill areas, the total cost an increase above 30% would be warranted.
for an inclusionary zoning initiative would be
$1.2 billion.
* This estimate is based on the following housing unit allocation: 20
percent ELI apartments,40 percent VLl apartments, and 40 percent Li
condominiums. See Table 10for figures used to calculate.
Meeting the
Need for Housing
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Increasing Supplies of
Market Rate Hoysing
Theoretically, a massive increase in the supply
ofmarketrate housing would cause prices to fall,
increasing affordability. However, this market
dynamic is extremely unlikely to occur in Sili
con Valley. First, future job growth will dwarf
all projections ofhousing growth.The Associa
tion of Bay Area Governments'(ABAG)pro
jections indicate that Santa Clara County will
see approximately 231,000 morejobs created by
the year 2020.^' However, housing construc
kind will be valuable to a portion ofthe region's
growing workforce,permitting economic expan
sion to continue and offsetting price inflation.
However, with demand for housing projected at
112,000 to 146,000 units over the next20 years,
this gain would meet only 50 to 65 percent of
projected need. To meet growing demand, the
SVMG report recommends changing land use
policies to accommodate more units. These
changes could produce an additional 36,700
tion is expected to increase by only 74,30O imits units; an improvement,but one that barely meets
in Silicon Valley, defined as Santa Clara County the predicted demand. In consequence, it can
and parts of Santa Cruz, San Mateo, and not reduce the existing shortage or bring down
Alameda Counties.^® Secondly, since the re excessive prices associated with it. .
maining land available for residential develop
mentis relatively small,even rapid development
of vacant parcels will fail to haye a major im
1,
pact on the price of the much larger developed
TABLE 13:
base.
Total resources needed for
3,600 infill apartments and condominiums
in San Jose and Santa Clara
Comparing the possible construction of new
units to the increased demand for housing re
veals that reliance on market forces alone will
Units
Total capital gap
720 ELI apartments (i)
1440 VLI apartments
$156,031,200
1440 VLI condominiums .
exacerbate the housing crisis for the next two
Total resources
1. ELI units are 20% of the total here (as opposed to 1/3 In the
Mid-Coyote proposal) due to the much higher cost of ELI Infill
decades. In 1999, the Silicon Valley Manufacturinjg Group(SVMG)evaluated the amount of
land available for residential construction in Sili
$236,126,880
$154,788,480
$546,946,560
constmction.
\
i
con Valley. Given current land use regulations,
it was projected that 74,300 units could be added
before "build-out" occurs. An increase of that
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Evaluation
Benefit to Extremely Low-Income and
Very Low-Income Residents
Public Costs
Market rate units are priced at levels well above
Market rate housing is built without direct pub
the incomes of extremely low-income and very
low-income residents. Even a family at the up
lic subsidy. However,because California's pub
lic finance system severely limits taxes on real
estate,.housing development cannot pay for the
basic municipal services required ofa unit's resi
dents. For example, as noted in the previous
section"A Crisis of Our Own Making", the to
tal ofproperty tax for San Jose in 2000 equaled
half of the police department's operating bud
get. As a result,expanding the market rate hous
ing supply requires indirect subsidies either in
the form oftaxes on other activities (retail sales,
use ofutihties,etc.)or in areduction in per capita
levels of public services.
per end ofthe VLI range, earning 50 percent of
Private Costs
Feasibility
Private sector firms provide market rate hous
Opposition to marketrate housing developments
ing through their own investments and financ
tends to derive from two sources.As previously
median income($43,500) would spend over 50
percent of its gross pay for an average apart
ment.*
Leveraging Other Resources
Increasing the supply of market rate units does
not leverage resources for affordable housing in
any areas except Redevelopment Project areas
that employ tax increment financing. In those
areas, 20 percent of property tax increment is
reserved for affordable housing.
ing strategies. Through fees, these units pay for noted, city governments are discouraged from
public infrastmcture directly related to new de
approving new developments because of their
tax consequences. In addition, neighborhood
groups often oppose new developments,particu
larly those of higher density, fearing impacts
Scale
Given current land use policies, no more than such as traffic congestion,increased hbrary and
74,300 new units could be developed in Santa park usage, etc. These pressures may reduce the
actual amount of new construction below the
Clara County.
Silicon Valley Manufacturing Group's estimate.
velopments.
Longevity of Benefits
The price of market rate units varies with the
dynamics ofsupply and demand.Although these
will rise and decline to some extent in relation
ship to business cycles, the severe structural
imbalance between supply and demand in the * Average rent on an aparfmenl in Santa Clara County in December
2000 was $1,903, or $22,836 annually. Average rent includes below
region suggests that prices will continue to rise. market rate and rent controlled apartments. Tfiere are no figures for
average market rate units; however, two bedrooms often start at
$2,500.
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ng
/
Creating:NbwH
In FY 2000, San Jose's RDA produced annual
tax increment in excess of$140 million. In ad
Sybsldfzed Housing
dition to 20 percent ofthis annual tax increment,
the San Jose City Council allocated another $10
)
million in RDA resources for affordable hous
ing. When combined with a small amount of
federal and state support, these resources wiU
enable the San Jose Housing Department to al
The provision ofsubsidized housing from either
public or private sources is the principal strat
egy currently used in Silicon Valley. Increasing
our community's reliance on it further hinges
on the extent to which new subsidies can be gen
erated. The major current sources for suljsidies
are rioted below.
locate $240 million to fund the construction of
6,000 affordable units by 2004.^'
Other cities in the region also have RDAs. Their
tax increment, however, is much smaller.
In FY 1999-2000, the RDA tax increment rev
enues ofother cities in the county in milhons of
RedevelopmentAgencies
dollars reached the following levels:
Redevelopment agencies, or RDAs, are man
dated to eradicate blight in Cahfomia's cities.
They do so by accumulating property taxes in
Milpitas
24.2
Santa Clara
17.4
Morgan Hill
14.1
Redevelopment Project Areas, bonding these
Campbell
2.4
revenues and investing the bond proceeds in new
Mountain \Tew
1.58
buildings and infr^tructure. Under state law,
Sunnyvale
2.08
RDAs must allocate 20 percent ofthe tax incre
2.017
Los Gatos
ment they receive for low- and nloderate- in
come housing. Using these resources, over the Based on the legal requirement that 20 percent
past 13 years, the City ofSan Jose and the local of tax increment must be allocated for afford
redevelopment agency have invested $317 mil
lion to build more than 10,000 units of afford
able housing. More than 85 percentofthese units
went to families earning less than 64 percent of
the median local income. Because they seek to
able housing, these cities together could gener
ate $12.28 million for affordable housing devel
opment.*
Two factors inhibit availability of San Jose's
leverage the RDA investment, during the past RDA funds. First, current San Jose tax incre
six years alone,local officials have also secured ment revenue has already been bonded to se
almost $175 million in tax credits and $3.7 mil cure the funds needed to meet the city's 6,000-
lion in tax exempt bond authority for affordable
housing development.
•12.8 million Is derived from 20 percent of the total RDA tax Increment
for all cities.
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_
TABLE 14:
Additional 5% of San Jose RDA revenue available, 2006-2010
TiFd)
01-02(base year) $149.055.072
$162.392.494
03-04
$173,315,543
02-03
04-05
181,659,454
05-06
190,742,427
200,279,548
06-07
07-08
210,293,525
08-09
220,808,202
09-10
Growth in TIF
$13.337,422
$10,923,049
$8,343,911
$9,082,973
$9,537,121
$10,013,977
$10,514,676
$11,040.410
80% of growth
$10,669,938
$8,738,439
$6,675,129
$7,266,378
$7,629,697
$8,011,182
$8,411,741
$8,832,328
20% of growth
$2,667.484
$2,184,610
$1,668,782
$1,816,595
$1,907,424
$2,002,795
$2,102,935
$2,208,082
20% of growth
bonded P'
Additional 5% of
TIF (3)
$23,195,517
$18,996,607
$14,511,150
$15,796,474
$16,586,298
$17,415,613
$18,286,394
$19,200,713
$8,119,624.70
$8,665,777.15
$9,082,972.70
$9,537,121.34
$10.013,977.40
$10,514,676.27
$11,040,410.09
$11,592,430.59
231,848,612
Total
$1,720,394,877 $82,793,540
$66,234,832
$16,558,708
$143,988,765 $78,566,990
1 TIF estimates from RDA 2002-2004;Annual growth 2004-2010 estimated using 5% average growth rate peryear
2 includes 1.15 coverage ratio
3To reach this amount,funds could be taken from bonded proceeds(column 4), or, if TIF growth is substantially higher than these projections,from 80% of growth in tax
incrementfunds directly(column 5)
unit target. As a result, the 20 percent oftax in
to be available after 2005, legislation must be
crement fundSaefimds earmarked for affordable introduced to allow the RDA to collect tax in
housing for tn&iiext 30 yearsaehave already been crementfunds for an additional period ofyears.*
allocated.Additionally,since the RDA is legally
required to issue no future debt after 2004, the Against this backdrop,the potential for signifi
City of San Jose caimot commit tax increment cant RDA resoiurces in the fiiture clearly exists.
funds above 20 percent after 2005.
However, there is another strategy available to Evaluation
secure RDA money for affordable housing. Cmrent RDA policy dedicates 25 percent oftax in
Public Costs
crement to affordable housing;raising this level All RDA revenues are public funds. Since they
to 30 percent or greater could generate over $8 can be used for other capital projects which ben
million annually. The mechanism ofincreasing efit blighted areas, RDA dollars allocated for
ftmding as well as the amount should depend on housing that exceed the legally mandated 20
the rate of growth of tax increment dollars. If percent impose an opportunity cost on the com
the growth rate is projected to be consistently munity.
high, then a percentage of tax increment could
be allocated directly to housing. However, if
growth is sluggish, more revenue could be gen
erated from taking the additional 5 percent from
the proceeds after the city bonds tax increment
growth. Either way,for the additional 5 percent
'See Table 14.
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28
Private Costs
units affordable to ELIresidents. This year,how
Private housing developments in redevelopment ever,the San Jose City Council chose to increase
areas are required to provide 15 percent oftheir funding for housing for ELI families for a oneunits for low-to-moderate income households. year period.
Also, the RDA can seek to negotiate subsidies
for affordable housing from private developers Leveraging Other Resources
when it invests public funds in their projects
RDA funds are often combined with tax credits
or other sources of capital to increase the nrunWhile subsidized housing projects vary in their ber ofaffordable imits in a project. On average,
\J
costs, San Jose's RDA strives to use its invest the San Jose Housing Department achieves a
ments to encourage developers to create as many leverage ratio of three. In many cases, a major
affordable housing units as possible. Based on source ofadditional financing is federal and state
past experience, for every $10 million of RDA low-income tax credits. However, competition
resources allocated,the city is likely to generate for tax credits is tight. In 2001, the State's first
either 254 LI units or 209 VLI units. The eco
nomics ofELI units are more complex.Because
aflfordable housing payments by ELIfamilies are
so low, the combined financing sources in a
project are often inadequate to cover the needed
subsidy. Therefore,the other units in a complex
round allocation oftax credits for multi-family
projects indicated $393.87 million would be
available. Total applications exceeded $660 rnillion. Despite stiff competition, over the last six
years San Jose has seemed $176 million in tax
credits.
essentially help subsidize the ELI units. Under-
these circumstances,the number ofunits gener Feasibility
ated will depend on the specific characteristics An extension ofthe bonding capacity ofthe San
j
of a project.
Jose RDA beyond 2004 depends on state legis
lative action.Ifthe extension is granted,it could
Benefit to VLI and ELI Residents
include an expansion ofthe portion ofthe RDA
RDAfunds can be targeted towards VLI and ELI tax increment used for affordable housing. Both
residents. However,in the absence ofadditional state legislators and Santa Clara County officials
funding,there is ah inverse relationship between may press to increase it beyond the current 20
the number ofELI units constructed and the to
percent requirement.
tal number of affordable units developed. For
example, $10 million coiild generate 209 VLI
umts. Based on average city subsidies for ELI
umts(other than single room occupancy),ifone
third ofthat subsidy were allocated for bousing
affordable to ELI families, the total number of
units created would drop to 169.* In the past,
the RDA has placed little emphasis on creating * $39,000 for LI; $47,700 for VLI; $116,000 for ELI;figuresfigg^ar^^
Jose Housing Authority.
New Housing
Options
EVERYONE'S
VALLEY
The Housing Trust
3,000 units. With available funding of $6.67
million, 3,000 units would receive an average
The Housing Trust of Santa Clara County subsidy per unit of approximately $2,250. For
(HTSCC)is a public/private partnership, coor this strategy to be effective,it will be necessary
dinated by the County of Santa Clara, Sihcon for other sources to provide the substantial sub
''^^ey Manufacturing Group, Collaborative on sidies needed to construct apartments affordable
Ifiislng and Homelessness and Community
rOundation Silicon Valley for the purpose ofrais
ing funds for affordable housing. Over the past
to ELI households.
21 months, the HTSCC has raised $19.1 mil
Evaluation
lion, with two thirds coming from the private
sector and the remainder from public funds.The Public Costs
HTSCC has a current goal of raising $20 mil The Housing Trust Fund has received contribu
tions from the following public entities:
lion.
HTSCC leaders plan to allocate these funds
City ofSan Jose
$1,000,000
equally to address the following three different
housing priorities: the construction of new, af
fordable rental units; assisting first-time home
buyers through low-interest loan opportunities;
and offering homeless people transitional assis
tance and longer-term placement in more stable
Santa Clara County
$1,000,000
City of Milpitas
$500,000
City ofPalo Alto
$500,000
City of Sunnyvale
$500,000
City of Campbell
$250,000
City of Cupertino
$250,000
housing. With $6.67 million,the HTF estimates
Town ofLos Gatos
$250,000
its "First-Time Homebuyers" program can as
City of Santa Clara
$250,000
sist as many as 800 families achieve home own
City of Morgan Hill
$100,000
ership.Another $6.67 million will provide fund
ing for the development oftransitional housing
and shelter for roughly 1,000 homeless persons.
Town of Monte Sereno $15,000
Private Costs
Corporations have contributed $12.8 million to
It should be noted that the Housing Trust does the HTSCC.Adobe Systems,Advanced Micro
not intend to be the primary ftmder for building Devices, Applied Materials, Cisco Systems,
new, affordable housing. Instead, it will focus Hewlett Packard,Intel and Knight-Ridder have
on"gap"financing exclusively for non-profit de
velopers, using its resources to make up the dif
ference between funds generated from other
each contributed at least $1 million.
Scale
sources and the full cost of the project. The By using $6.67 million to provide"gap"financ
HTSCC estimates it can provide this tjqje of ing,the HTSCC provides low/no interest loans
"gap"financing to help complete approximately to a large nmnber ofunits.
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Longevity of Benefits
Since the HTSCC is not.a>nriniary funder for
apartment constructionnti^not attemptto stipu
late the length of time projects will remain af
fordable.
Benefit to VLI and ELI Residents
The HTSCC intends to target its funds for new
construction towards 3000 individuals and fami
lies with 40 to 60 percent ofmedian income. Its
homeless assistance program will benefit ap
proximately 1,000 extremely low-income
people.
Leveraging Other Resources
The HTSCC intends to leverage its resources by
combining its funds with tax credits and subsi
dies from local, state and federal governmental
sources.As a result ofthe high subsidies required
for affordable ELI and VLI units, the HTF sup
port will be approximately only 1.25 percent of
the total subsidy for ELI units and 1.8 percent
ofthe total subsidy for VLI.*
Feasibility
With $19.1 million already in hand, the feasi
bility ofthe HTSCC reaching its $20 million dol
lar goal is excellent
* SeeiTable 10: calculations are based on WPUSA calculation of the
capital gap
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Based on those estimates, a target can be set as
Tax increases for Affordable
follows:
Hoysing Development
Units
Subsidy
Apartments
1667 ELI apartments
$299,969,982
833 VLI apartments
$105,968,429
Additional revenues for affordable housing
could be secured by raising sales taxes, utility
833 VLI condos
$138,425,441
taxes, conveyance taxes or by issuing general
1667 LI condos
obligation bonds which can be paid for through
5000 total units
$113,651,059
$658,014,911
Condos
property taxes. In each case,the state constitu
tion requires such measures to be placed on the The discussion below evaluates the ability of
ballot and approved by a two-thirds vote.
various tax strategies to raise this amount ofcapi
tal.
Evaluotlon
Utility taxes
San Jose's utility tax of5 percent on gas, elec
tric, and inter-state phone biUs generated rev
Public Costs
By definition, any tax increase strategy gener enues of $53,426,000 in 1999. This amount is
ates fimds fi-om private sources for public pur expected to increase substantially as a result of
poses. The government acts as a conduit, man
aging the expenditure offimds. Minor adminis
rapidly rising prices for electric power and natu
ral gas bills. In order to generate $658 million,
trative costs are associated with tax increases.If the tax would have to incre^e to approximately
the tax is placed on the ballot at a regularly 11 percent. A tax of that scale would generate
scheduled election the costs ofadoption will be an additional $65.8 million, which, if used as
minimal.
debt service for revenue bonds, could produce
$658 million in capitalfor housing development.
Private Costs
In order to determine the potential size ofa tax Sales tax
increase for affordable housing construction, it The sales tax in Santa Clara County is 8 per
is necessary to establish the desired target num cent. On a countywide basis, taxable sales gen
ber of units and calculate the costs of subsidies erated $30,348,644,000 in 1999.^^ A county-wide
for those units. For the purposes of this analy increase in the sales tax by a halfofone percent
sis, the goal will be equal to the number ofimits would generate $151;743,220. Over the course
that might be generated in Mid-Coyote VaUey ofapproximately four years a halfcent tax could
through inclusionary zoning (see Table 12). generate $606,972,880 for housing development.
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Conveyance tax
Benefit to ELI and VLI Residents
San Jose's conveyance tax on real estate trans
The taxing agency can specify the proposed ben
actions produces $1.65 for every $500 of value efits to ELI and VLI residents in the measure
transferred. Tax receipts vary over time. While placed before the voters. The program noted
the number ofproperties sold changes in accor above would produce 1,667 ELI apartments,873
dance with business cycles, the value of real VLI apartments, 873 VLI condominiums and
property in the region tends to increase steadily. 1,667 LI condominiums.
Assuming that the current tax rate wiU generate
an average of$20 million a year, the tax would Feasibility
have to be increased to $6.60 for every $500 to The feasibility of singular tax increases of this
produce an additional $65 million. That amount, size being approved by two-thirds of the elec
in turn,couldbe bonded to secure a total of$650 torate must be considered problematic. For ex
million.
ample,to reach the $658 million target, convey
"Itwould bean
ance taxes would need to be increased four times.
General Obligation Bonds -property taxes Regarding utility tax increases, skyrocketing
error to'sell
Property taxes can be increased to pay for Gen electricity rates makes an increase in residential
eral Obligation bonds. As prescribed by Propo utility bills politicaliy unfeasible.
sition 13, property taxes are fixed at 1 percent
short'San Joise
ofassessed valuation,$677 million in 2000. To However,as demonstrated by last year's approval
reach $658 million, an increase of 7.76 cents of property tax-based bonds for parks, libraries
commitmentto
for every $100 of assessed value is required and flood control, San Jose voters are clearly
(about $310 annually for the average home willing to invest in the betterment oftheir com
owner). This would yield $52,530,000 munity. This is particularly true among middle
annuallysethe payments for a 30-year bond of and higher income homeowners who value the
$658 nullion.
families ond
their
improving the
quality of life in
Silicon Valley."
deductibility of property taxes fi-om their fed
eral income taxes. It would be an: error to "sell
Scale
short" San Jose families and their commitment
The number ofunits constructed wfould vary with to improving the quality of life in Silicon Val
the size ofthe tax increase. As noted above,the ley.
sample tax rates just described would generate
5,000 affordable units.
In a similar vein,the most popular form oflocal
Longevity of Benefits
levy, Santa Clara County's sales tax, is only
slightly above the statewide average. Last year,
Through deed restrictions, subsidized units can sales tax dropped statewide by a quarter ofa cent.
remain afibrdable for any specified period or
Silicon Valley voters could consider a t^jpt^-
indefinitely.
rary, four-year half cent county sales taxaethat
alone would generate enough capital to fmitf^lmost the entire project.
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Protieclihg:^istihg;Housing:Pptibnill
Evaluation
Rent Control
Public Costs
The costs ofrent control laws are limited to ad
ministrative expenses and occasional legal ex
penses associated with litigation against local
ordinances.Fees on rental units generally cover
administrative costs.
Where their enactmentis permitted,sensible rent
controls can ejBfectively protect large numbers
Private Costs
of tenants against excessive rent increases. By The private costs ofrent control are principally
doing so, they prevent the existing number of the loss of excessive rent increases. Conceptu
affordable housing units from being reduced due ally, these increases represent the difference be
to price inflation. In this sense, while rent con
tween market rents and the rent levels estabhshed
trols do not "create" new housing, they allow in the local ordinance. Constitutionally,rent con
those programs that do construct new affordable trol laws must provide property owners with a
umts to increase the "net" supply of affordable fair and reasonable return on their investment.
housing in the region.
Scale
San Jose first enacted rent control over 20 years
ago. However, the city's ordinance exempts all
single family homes, duplexes, and apartment
umts built after 1979. Still, rent control pro
tects residents of approximately 44,000 apart
ments and 10,000 mobile home spaces. In gen
eral, the ordinance limits rent increases to eight
percent for apartments and three percent for
mobile homes. In stark contrast, last year rent
increases for exemptunits averaged 37 percent.*
Rent controls can cover substantial numbers of
tenants even within the limits of state law. En
actment ofrent control ordinances in Mountain
View, Palo Alto, Sunnyvale, and Santa Clara
could cover approximately 58,506 house
holds.***
Longevity of Benefits
Though rent control policies may be overturned
by future city councils or by voters through the
initiative process, their popularity once enacted
State legislation prohibits San Jose firom extend in Santa Clara Coimty is beyond question. In
ing rent control to units built after 1979. Other fact,no local rent control measure has ever been
cities that have never adopted rent regulations revoked or overturned.Rent control can be modi
cannot apply rent control to any housing built fied by state law or by court decisions that
after 1995. In most Silicon Valley cities,the vast
majority ofrental housing was built prior to 1995
ofiering the potential ofrestricting escalation in 'Rents increased 70 percent from 1996-2000; source: REALFACTS.
"Costa Hawkins bill adopted In 1995.
the housing costs for many renters.**
"•See Table 15.
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modify previous interpretations ofthe constitu
tional protections afforded to property owners.
ii
TABLE 15:
Rent control and potential new rental units
1 a) Number of potential beneficiaries ot rent control
In addition, state law mandates that local rent
Current No.of
Estimate of No.
Average No.
apartments(i)
of apartments
of persons per
built before
control laws must include vacancy decontrol
.provisions. Vacancy decontrol permits owners
to raise rents to market levels whenever a tenant
voluntarily vacates a unit. Thus, over time, an
increasing percentage of imits move towards
market levels.
'
Benefits to VLI and ELI Residents
The majority of VLI and ELI residents of Sili
con Valley communities are renters. For these .
families, rent control offers the only safeguard
against being forced tp compete for the ex
tremely small number of new, affordable units.
However, rent ordinances have several limita
1995(2)
Mountain View
Palo Alto
Santa Clara
Sunnyvale
Total
17,000
7,274
16,439
23,000
63,713
15;470
6,474
15,453
21,160
58,557
potentially
household as of covered by
1990(3)
rent control
2.24
34,653
2.24
,
|
No. of renters
2.50
2.43
14,501
38,632
51,419
139,205
1
1 b) Number of potential new rental apartments before bulid-out 4
Mountain View
PaloAlto
Santa Clara
569
Sunnyvale
2825
Total
5553
|
1159
1000
1 Estimates of the current number of apartments units In each city were obtained from Planning or
Housing Dept. personnel In each city and California DepL of Finance projections. All numbers are
approximate.
2Assuming the proportion of the current stock of multlfamily housing built before 1995 equals the
proportion of the current stock of apartments built before 1995; data on new multlfamily
construction Is from the Constmctlon Industry Research Board. Because ofthe Costa-Hawkins law,
only apartments built before 1995 would be covered by a rent control ordinance.
3 According to the 1990 Census,as reported by www.baynet.com
tions. First, it is difficult for rent control laws to
4 Estimated for Sunnyvale and Mountain View assuming that the current proportion of apartments
reduce rents, as opposed to simply restricting
Alto Planning Dept. The figure for Santa Clara Is estimated using the January, 2001, vacant land
increases. Ifcontrols are enacted after rents are
survey prepared for the Home Builder's Association of Northern California.
will remain constant through the production of new units! Estimate for Palo Alto Is from the Palo
already prohibitively high in relation to ELI and
VLIresidentincomes,they can do no more than can easily increase rent beyond the legally man
stop a difficult economic situation from becom dated 8 percent per year with little fear oflegal
ing even worse.* Second,in San Jose mid some repercussions. In addition, as noted elsewhere
other cities, the burden for enforcing rent con in this report,by exempting units from rent con
trol rests with the tenant. Unless renters are edu
trol after they become vacant, state law creates
cated to their rights imder rent control,landlords an incentive to force long term tenants to leave
their units.
* Rent controls have only a limited ability to offer special protection to
low Income tenants. The US Supreme Court upheld provisions In San
Jose's rent policy to take Into consideration "hardship" to tenants when
establishing a legal rent level. However, this "hardship clause" could
only be considered after the property owner had been assured a rent
increase sufficient to provide a fair and reasonable return on his
investment [Pennell v. City of San Jose, 108 S. Ct.849(1988)].
Therefore, significant Increases could still be approved even If the
resulting rents were beyond a tenant's ability to pay.
Existing
Housing Options
!! 1'^
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■
Leveraging of Other Resources
Rent controls do not normally attract additional
resources for the development of affordable
housing. Some opponents have claimed that rent
control discourages private investment in new
Feasibility
Despite the financial clout ofthe rental housing
industry, the broad appeal ofrent control makes
its defeat anything but certain. Rent control or
dinances have been beaten in elections in Palo
rental housing. This assertion has little validity Alto, Mountain View,and Sunnjwale,while city
given the State's prohibition on rent control for councils in San Jose and Los Gatos have each
units built since 1995. Additionally, all of the approved apartment rent control. The Cities of
urban cities without rent control in Silicon Val
San Jose,Milpitas, Gilroy,and Morgan Hill have
ley(Palo Alto, Mountain View,Santa Clara,and mobile home rent control ordinances, and the
Sunnjrvale) are approaching build-out. It is es City ofCampbell has a Mediation Ordinance that
timated that only 5,500 apartment rental units discourages "excessive" rent increases and recan be built on remaining vacant land
tahatory evictions and provides mediation ser
vices to resolve rent disputes.'^ On two occa
sions in the past twenty years, industry cam
paigns to prohibit rent controls on apartments
or mobile parks throughout California have been
placed on the statewide ballot. Both measures
were soundly defeated.
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Existing
Housing Options
Protectihg%isHng Housii^^^
cannot be raised ifthe former tenant was evicted,
this restriction has proven to be essentially un
Jyst Cayse Eviction
7
enforceable. In this respect, through evictions
landlords gradually transfonh affordable units
into more costly ones.
To respond to this concern,at least twelvejuris
dictions in Cahfomia have adopted a "just cause"
Under California law,a landlord is not required eviction policy.* While these measures may
to have justification for terminating a tenancy. differ in detail, they have as a core element the
If a renter challenges an eviction in court, the requirementthat evictions may only be executed
property owner, with few exceptions,need only for enumerated reasons. These just causes in
demonstrate that proper notice has been given, clude, but are not limited to: failure to pay rent,
the notice has expired, and the tenant is still on breach of a legal lease clause, use of the pre
the premises.
"Eviction can
become a
mises for an illegal purpose,nuisance behavior,
unauthorized subletting and occupancy by the
defacto
For a tenant facing eviction, the consequences owner or an owner's relative. The goal of the
are enormous.In a tight housing market,the task ordinance is to provide owners with the ability
offinding another rmit in a brief period oftime to remove tenants when they have legitimate
is often insurmountable.To compound the prob reasons for doing so. At the same time, renters
sentence to
homelessness
lem,most landlords wiU automatically refuse to are offered some minimal level of security in
rent an apartment to anyone who has recently their apartmentifthey pay the rent promptly and
been evicted. Therefore, eviction can become a abide by all the stipulated rules.
de facto sentence to homelessneSs or even leav
ing the region.
Evaluation
However,there is another consequence to evic
tions that impacts our eritire community. Since
Public Costs
property owners are not required to reveal rea
Just cause eviction ordinances impose adminis
sons for evictions, it is difBcult to prove what trative costs onlocal government. For example,
their true motives may be. A landlord may even owners must be informed of the provisions of
evict a low-income tenant in order to raise the the measure. Enforcement ofthe measure is ul
rent.As previously noted,this rationale for evic timately the responsibility of the courts. How
tion is increasingly likely in the wake of state ever,to the extent the measure is clearly drafted,
law requiring the rent "decontrol" of units that it can discourage violations.
have been voluntarily vacated. Though San
Jose's rent control ordinance specifies that rent
* These include Berkeley, Beverly Hills, East Palo Alto, Hayward, Los
Angeles, San Francisco, Santa Monica, and West Hoiiywood..
Existing
Housing Options
WORKING PARTNERSHIPS I
oreven
leaving the
region."
EVE
Y O N E'S
VALLEY
#
cates large numbers of families experiencing
Private Costs
Although Igmdlords often claim they will forfeit serious hardship.
their ability to evict renters, in truth they will
retain their right to issue evictions for any rea In comparison,San Francisco, which has enacted
son that imposes costs on the property. There a just cause eviction ordinance, reported 2,761
fore,private costs must be considered to be neg evictions in 1999-2000.Adjusted for population
ligible.
^
differences, that would have produced 6,275
evictions in Santa Clara County,a figure almost
Scale
halfthe current number.
The following cities in Santa Clara County have
large numbers of apartment renters:^'*
Longevity of Benefits
Just cause measures are established by local or
San Jose
169,400
dinance. Unless the ordinance has a sunset
Palo AJto
14,544
Mountain View
34,508
clause,it will remain in place unless overturned
by a decision ofthe city council.
Sunnyvale
51,432
Santa Clara
38,606
Benefit to ELI and VLI Residents
Total
308,490
Just cause ordinances provide the same protec
tions to all renters covered by the measure, re
Ifjust cause eviction measures were adopted by gardless oftheir income level. However,the ef
aU of these cities, then 308,490 tenants would fects of these measures are particularly benefi
achieve greater levels ofeconomic security.
cial to ELI and VLI families who generally have
fewer housing altematives.
Attempts to calculate the number of renters ac
tually subject to eviction each year, and hence Feasibility
the number immediately likely to benefit from As noted, just cause ordinances have been
these ordinances, is hampered by inadequate adopted in a dozen jurisdictions in the state, in
record keeping on this subject. The Santa Clara cluding four in the Bay Area, No obstacles to
County Superior Courtreports that between 250
^and 350 unlawful detainer actions are filed each
month.Interviews with Legal Aid Society attor
neys in San Jose suggest that between 10 per
cent and 25 percent of30 day notices to vacate
result in unlawful detainer filings. In that light,
it is estimated that anywhere from 12,000 to
42,000 households experience eviction each
year. In light ofthe region's small inventory of
vacant apartments, even the lower figure indi
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Existing
Housing Options
their enactment have been identified.
Meeting the Need for Affordable Housing
Few problems in America are as costly as the Ourreview ofthe available options suggests that
need to develop affordable housing; but almost a successful strategy to develop affordable hous
none are more expensive to ignore. As this re
port described,the housing crisis in Silicon Val
ing in Silicon Valley must include the following
elements:
ley grew from a series of policy choices during
an era where the San Jose area was transformed
from a quiet camery town to the center of the
new,global economy.
Our challenge as a community isn't to find any
one solution to the housing crisis. There isn't one.
"The two most
Creating New Housing
•Implementing Inclusionary Zoning
•Increasmg the Percentage of RDA Tax
the new affordable housing we need.
ofthe crisis
we face:
• Allocated to Affordable Housing
• Creatmg an Affordable Housing
Instead,it is to identify the components ofa so
SupLriund
lution: options that enable Silicon Valley to be
gin to answer the two most pressing aspects of Protecting Existing Housing
the crisis we face: maintaining the viability of
• Preservation ofHUD Financed
the affordable housing we have, while creating
pressing aspects
Affordable Housum
maintaining the
viability ofthe
affordable
housingwe
have,
while creating
• Enacting Rent Controls m Urban
L ommunii les
Clearly,some problertis are beyond the scope of
actioti by our commumty alone. For example,
state fiscal policies that discourage cities from
the new
affordable
• Enactmg a Just Cause E\ iction
Ordinance and Estabh^liimr a
Rent ReliefTask Force for San Jose
promoting housing developmentin favor ofstrip
malls can only be addressed by lawmakers in
Sacramento. However, there is much that our
commumty can do ~ and should do ~ to pre
serve and expand affordable housing for Sili
con Valley's families.
WORKING PARTNERSHIPS I
housing we
need."
ii
t :<<
Enocting
Enacting a Jyst Cause
Rent Controls
in Urban
Communities
Evlctioii Ordinance and
Though options for expanding the pool of af
fordable housing clearly exist,the current struc
tural imbalance between supply and demand of
housing continues to make spiraling rental costs
inevitable.Through the enactment ofreasonable
rent controls,includingjust cause evictipn guar
antees,rent increases can be limited to thosejus
tified by cost increases and a fair rate ofreturn
to owners. As previously noted, rent controls
would protect a total of 58,500 households if
Establlsiiing a Rent Relief
Task Force in San Jose
Under state law, San Jose is prohibited from
extending rent control to additional new hous
ing units. However, the city can still take sig
nificant steps to increase the security oftenants,
reduce the hardship associated with escalating
rents, maintain housing quality, and discourage
excessive rent increases.
By enacting a just cause eviction measure, San
Jose can prevent evictions in rentcontrolled units
applied to rental units in the major urban cities for the purpose ofincreasing rents,an action that
lacking ordinances: Palo Alto, Moimtain View, is already prohibited by the city's rent control
Santa Clara and Sunnyvale. Since the number law, but which is largely unenforceable. Such a
ofadditional rental units likely to be builtin these measure would also extend protection to renters
cities is small, the potential loss of new units in units that are exempt from rent control.
resulting from the imposition of controls must
be considered minimal.
In addition, San Jose can establish a rent relief
task force with the mission ofcrafting strategies
To reduce the extent to which these measures to improve the economic conditions ofthe city's
produce inconvenience or costs to property own
ers, the cities noted should take pains to involve
both tenants and owners represented to assist in
all aspects ofdesigning fair rent control andjust
include representation from both owners and
tenant advocates. Tenant protection measures
cause eviction policies.
are only effective to the degree that renters are
tenants despite the restrictions of state law. As
in the case of other cities, the task force should
cognizant of them. Therefore, a primary focus
ofthe task force could be to determine ways that
the protections under San Jose's current rent
control law can be more firmly guaranteed and
expanded. For example, the city could initiate
widespread education programs to inform rent
ers of their right to contest high rent increases.
Meeting the
Need for Housing
WORKING PARTNERSHIPS I
protection
Also, the city could aggressively enforce the
currentprovisions ofthe ordinance,particularly
the prohibition against rent increases on units
from which the prior tenant had been evicted. A
measures are
full review of the current ordinance is also by San Jose's rent control measure, scant effort
only effective
needed to determine the extent to which the level has been made in the past to guarantee its en
"Tenant
to the degree
renters are
cognizant of
them."
As noted earlier, tenant protection measures are
only efiective to the degree renters are cogni
zant ofthem. For example, though resideirts of
HUD projects built prior to 1979 are protected
ofrent increases permitted under its provisions forcement.For this reason,an educational com
should be adjusted downward. Other possible ponent must be incorporated into any renters'
strategies to be evaluated might include man rights measures enacted locally. In this regard,
dating code enforcement inspections when rent Santa Clara County officials could play an ef
increases grow beyond a predetermined level, fective role in developing a joint effort among
or assisting tenants to pay the high initial costs San Jose and other mrmicipalities that have ap
of renting an apartment (an amount that often proved similar measures.
exceeds $5,000).
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Meeting the
Need for Housing
EVERYONE'S
VALLEY
Protecting Existing Housing
CreGliiigAn
Preservation of
'HUD Financed
Affordable Housing
■ Superfund
Affordable Housing
As described earlier, financing an affordable In order to protect the thousands oflow income
housing initiative on a scale necessary to ease units in apartment complexes that may be con
"Affordable
housing will
the Silicon Valley's housing crisis would require
what would amount to an affordable housing
"superfund" of$1.2 billion. Sources for financ
ing 50 percent of this fund have already been
verted to market rates, the city should investi
gate carefully all proposed conversions to de
termine if any prior subsidy or land use deci
sion had been premised on a commitment of
identified: developer contributions would pro longer term affordability. In addition, the city
only be recog
vide approximately $200 million; RDA funds could make clear that all of such units con
from all cities with agencies could offer an ad structed after 1979 wiU be immediately subject
nized as a nec
ditional $200 million; while tax credits could to the San Jose rent ordinance as soon as the
essary invest
contribute another $200 million. The source for contract with HUD has been terminated.
ment if public
the other half of the fund,$600 million, would
officials and
be provided by temporary sales tax increases and
other opinion
general obligation bonds.
leaders begin to
As noted earlier,San Jose and area residents have
address it as
one."
demonstrated a clear willingness to provide sup
port for necessary public investments. However,
it is also evidentthat affordable housing will only
be recognized as a necessary investment ifpub
lic officials and other opinion leaders begin to
address it as one.
WORKING PARTNER!>H1PS USA
Policy Briefs:Sllicon Valley Equity Series
Meeting the
Need for Housing
42
6. City's Monitoring Plan
ANNUAL ACTION PLAN
Federal Sources
San Jose is an "entitlement" city and receives federal funds from the following programs
• Community Development Block Grant Program(CDBG)
• HOME Livestment Partnership Program(HOME)
• Housing Opportunities for People with AIDS Program(HOPWA)
• Emergency Shelter Grant Program(ESGP)
The following describes the proposed uses of federal funds for FY 2001:
HOPWA FUNDS - $723,000 will be distributed to two housing and service providers with a
reserve of 3% for operating costs and administration. Allocations will be $350,655 to the AIDS
Resources,Information and Services(ARIS) program, and $350,655 to Health Connections Aids
Services,formerly known as the Visiting Nurse Association's AIDS project.
HOME PROGRAM FUNDS - A total of $4317,000 will be committed to project sponsors for
property acquisition in connection with new construction of rental units for EUATJ households
and other special needs populations, as well as for homeownership programs. Of this amount,
fifteen percent (or $647,550) will be set-aside for Community Housing Development
Organizations (CHDOs). An additional five percent may be used to support operating expenses
of CHDOs working on a housing development.
Ten percent ($431,700) will be for
administrative costs of the Participating Jurisdiction.
CDBG ~ Total funding of $15,996,000 will be available in FYOl/02 consisting Of $12,996,000
from the City's "2000 Entitlement grant, $1,500,000 in projected 2000 program income, and
$1,500,000 in prior year funds. San Jose will establish a reserve of $100,000 for a contingency
reserve for cost overruns and/or later programming. Fifteen percent(15%) of entitlement funds
and $225,000 in prior year funds will be targeted to human service and housing projects. Eightyfive percent (85%) of entitlement funds, all 2000 program income and the remaining available
funds will be allocated for conununity development improvements including housing
rehabilitation, fair housing, capital improvements, code enforcement and small business
assistance.
EMERGENCY SHELTER GRANT (ESG) FUNDS - A total of $443,000 is available. Of
this amount, 70% will be allocated for shelter operating costs ($310,100), and 30% will be
allocated for support services ($132,900). Up to 20% of the funds will be set-aside for the
County's Cold Weather Shelter Program. Remaining funds will be made available to existing
shelters, day care centers, and homeless service providers.
The federal government provides additional funds for both interim/transitional and more
permanent housing facilities, supportive services, and prevention programs for the homeless
through the ESG. Various nonprofit service providers in the City also receive ESG funds directly
from the State and County.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
6
Other federal funds for the homeless include: •
Federal Emergency Management Agency(FEMA)
Supplemental Assistance for Facilities to Assist the Homeless(SAFAH)
Transitional Housing
Permanent Housing for the Handicapped Homeless
Section 811 Program funds - Supportive Housing for Persons with Disabilities (formerly
part of the Section 202 Program for the Elderly and Handicapped)
The Santa Clara County Housing Authority (which administers the City of San Jose Housing
Authority's programs by legal agreement) also receives federal funds, part of which are targeted
to residents of San Jose needing assistance. These programs include:
• Certificate and Voucher rental assistance programs (Section 8)- the Housing Authority, in
collaboration with the Homeless and Family Self-Sufficiency consortia, works to provide
supportive services for participants by acting as the local conduit for Section 8 funding.
• Shelter Plus Care rental assistance program for homeless persons with disabilities,
particularly mental illness, chronic alcohol and/or drug addition, and AIDS
• Family Unification and Family Self-Sufficiency Programs - two supportive housing
programs.
The Santa Clara County Housing Authority further plays a direct role in developing affordable
housing units. Acting as a nonprofit housing developer, the Housing Authority will continue to
apply for funds from the City and a spectrum of State,federal, and private sources for its various
development projects.
State and Local Sources
California State Redevelopment Law requires that where there are local redevelopment areas, the
property tax revenues generated by increases in assessed value within these areas after the
adoption of the redevelopment plans be allocated to the redevelopment agency to carry out its
redevelopment programs. State law further requires that at least 20% of these "tax increments"
be set aside for the development, maintenance and preservation of housing affordable to low- and
moderate-income households. A local jurisdiction need not limit the use of the funds to
redevelopment areas only, but may use the "20% funds" more broadly within its entire
jurisdictional boundaries, provided that the assistance is of benefit to redevelopment areas. The
City of San Jose allocates its 20% Housing Funds ~ as well as the housing rehabilitation portion
of its CDBG funds ~ for affordable housing development throughout the City according to fiveyear objectives in which 85% of the dollars are targeted to affordable housing for F.TJ, VLI and
LJ households, and 15% for housing affordable to MOD households.
In FY 2001-2002, the City will receive approximately $26 million doUars in 20% tax
increment funds, as well as additional 20% Housing Funds in the form of loan repayments and
interest, and supplemental agency funding in the form of bond proceeds. The amount of tax
increment financing is projected to increase steadily over the next five years. In order to
maximize its 20% Housing Funds, the Department of Housing expects to receive $60 million in
borrowed funds (including long-term bonds and a short term line of credit) during the fiscal
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
7
year 01/02- secured by the future stream of tax increment — for additional affordable housing
development. Federal Matching requirements will be met with 20% Housing Funds and, to a
lesser extent, through locally imposed exemptions from construction-related taxes and fees
for ELI/VLI projects. In providing financing for affordable housing development,the City of San
Jose policy is to provide financial assistance in the form of low-interest loans and grants.
Moreover, the City emphasizes gap financing rather than primary financing.
The City further requires that project sponsors leverage City funds with funds from non-City
sources to maximize the investment in affordable housing. As with current projects in the City
pipeline, project sponsors will be expected to leverage City funds with funds from various
programs such as (TCAC),(CDLAC), the California Housing Fmance Agency(CHFA)and
the State Housing and Commimity Development Department (HCD). These include the
Rental Housing Construction Program (RHCP)and the California Housing Rehabilitation
Program for Rental Units(CHRP-R), two programs on which local sponsors heavily depend
for other leveraging.
Private Sources
The City also expects its funds to be leveraged through a variety of private sources,including the
following:
Affordable Housing Program(AHP)of the Federal Home Loan Bank Board;
Community Reinvestment Programs of private lenders;
Other conventional lenders;
Tax-exempt bond proceeds (e.g., 501(c)(3) bonds);
Taxable bond proceeds;
^
Mortgage Credit Certificates; and
• California and federal low-income housing tax credits.
Anticipated Sources of Funds for FYOl/02
The table below indicates the anticipated amount of funding expected to be received from all
sources for the upcoming fiscal year.
At the State level, the City expects to continue receiving, either directly or indirectly (through
sponsors of affordable housing projects or nonprofit service providers), funding for affordable
housing rehabilitation efforts and programs to assist the homeless. Locally, the City expects to
commit its annual share of tax increment funds for new ^fordable housing pirpjects Citywide.
The following table highlights the anticipated amounts of funding for FYOO/01, showing a total
of $231,8 million in expected activity (both locally controlled and outside funding).
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
8
Anticipated Sources ofFundsfor FYOl/02
A.Formula/Entitlement Programs
4,317
HOME
CDBG
12,996
ESG
443
HOPWA
723
Subtotal — Formula Programs
18,479
B. Competitive Programs
Shelter Plus Care
1,200
Moderate Rehab SRO
7,4
■'V
Rental Vouchers
22,279
Rental Certificates
27,514
Public Housing Comp Grant
646
HOPWA Competitive
LIHTC
98.230
Lead-Based Paint Abatement
SAFAH
Supportive Housing
FEMA
RRP (loan repayments)
100
HUD 202
4,523
Mortgage Credit Certificates
Subtotal Competitive Programs
v
i-'vf .riCI
''jy ■ I
->i
CHFA
-i.'"
Tax Increment
24,049
Bond Proceeds (net)
119,983
Tax Increment Loan Repayments
4,038
Interest Income
4,645
Miscellaneous
443
Housing and Homeless Funds
100
177,100
'7;
Conventional Constr. Financing
29,834
Conventional Permanent Financing
29,834
AHP
Owner Eiquity
P
TSv.'
GRAND TOTAL
. . •'tfj -
153;!58
391,234
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
9
ACTIVITIES TO BE UNDERTAKEN
As noted in the Strategic Plan, there are several priority needs which the City of San Jose'intends
to address over the next five years. The first step in accomplishing the overall five-year plan is to
establish objectives for the upcoming fiscal year - 2001/2002. The one-year targets for FYOl/02
are based on a reasonable assessment of the opportunities and constraints the City of San Jose is
likely to experience in the upcoming year. The table below identifies the City's priority needs
and one-year objectives, which'may be measured in terms of units funded or lower- and
moderate-income households assisted' as well as funding estimated to go towards each need.
PERFORMANCE OBJECTIVES FOR FYOl/02
Priority Need
One-Year Objective
UnitsyHHs
vouchers
1400
New Construction
58 '
$6,670,000
187.
$1,870,000
Rehabilitation
255
$4,100,000
Paint Grants
1063
$2,657,500
1,625
$101,562,500
Est.$
Need #3 — Public Housine Assistance. Need #5 Preservation
VLI/Ll Large Renter HHs, including Senior Renters, Disabled Renters,
Homeless, and others with Special Needs
Need #1 ELIA'Ll/LI Housine. Need #8 Disabled.'Need#9 Senior. Homeless
Need
ELI Large Renter HHs, Senior Renters, Disabled Renters, Homeless, and
Others with Special Needs
VLl/Ll Large Renter HHs, Small Renter HHs, Seniors, and Others with Acquisition/Rehab.
Special Needs
VLI/LI Large Renter HHs,Small Renter HHs,Seniors, and Others
with Special Needs
VLPLl Large Renter HHs,Small Renter HHs,Seniors, and Others
'with Special Needs
Need#4 Overcrowdine, Need #6 Substandard Units. Need #7 Geoerauhic New Construction
Distribution
Acquired/Rehabilitation 1872
ELWLl Large Renter HHs including Districts 3 and 5
Need#2 Home Ownershin
New Construction
100
$6,000,000'
MOD Owner HHs including seniors
Purchase Assistance
100
$900,000
Ll/MOD-income teachers
Purchase Assistance
TBD
$4,000,000
Homeless Need
New Construction
75
$2,472,500
Families with children, Domestic Violence
TOTALS
ELI=0-30% of median
VLI = 31-50% of median
LI = 51-60% of median
rental assistance
1400
new construcdon
1,858
acq/rehab
187
rehabilitadon
255
paint grants
first time homebuyers
100
ELI units
58
TOTAL
4,921
1,063
MOD = 61-100% of median
$9,372,500.00
'it should be noted, however,that the City's performance In meeting the targets should be assessed at the completion
of the FIve-Year Strategy, since the complexities of financing affordable housing development mean that. In any given
year, the specific targets shown may not be met.
^ 187 acquisition/rehabilitated units address needs#l,#4,#6,#7,#8,#9
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
10
GEOGRAPHIC DISTRIBUTION
i
New Construction ~ The City's successful dispersion policy has ensured that areas of the City
with high concentrations of lower-income households are not further impacted by the
construction of new housing affordable to lower-income households. While new affordable units
are being built in impacted areas, the emphasis is to build the majority of affordable units
elsewhere in the City. Below is a table of the new construction projects for FY 2000-2001,
speci^ng the Council Districts in which the project is to be built:
2001-2002 Completions
Project
District
Type
Fund Res.
Projection
Midtown Townhomes
6
For-Sale
93-94
31
Siena Court
3
For-Sale
94-95
15
Italian Garden Family
7
97-98
146
Helzer Courts
7
98-99
153
OUone-Chynoweth
9
7
Family
Family
Family
Senior ,
Piedmont & Sierra
4
Senior
98-99
95
Vista Park Senior n
7
Senior
97-98
82
Vista Park Senior I
98-99*
192
97-98
82 ^
715
2001-2002 TOTALS
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
11
Completion
To be completed 5/01
completed 11/00
To be completed 6/01
completed 3/01
To be completed 8/00
Completed 6/00
To be completed 3/01
Completed 11/00
HOMELESS AND OTHER SPECIAL NEEDS
In addition to the production objectives to meet the homeless needs noted in the Strategic Plan,
the following homeless/special needs activities are anticipated to be undertaken:
HOPWA Funds
The City works directly with the Santa Clara County HTV Planning Council and the other
entitlement jurisdictions in Santa Clara County to determine the appropriate allocation offunding
according to need. The $723,000 in HOPWA funds are proposed to be distributed among the
following housing and service providers, with a reserve of 3% for operating costs and
administration ($21,100):
$350,655 to AIDS Resources, Information and Services (ARIS) of Santa Clara County, which
provides HIV/AIDS prevention and support services cOuntywide. ARIS will provide
low-cost housing for people disabled by HIV who. are homeless or at risk of
homelessness,food and nutritional programs, practical home support, and one-to-one and
group efforts.
$350,655 to Health Connections Aids Servicesj formerly known as Visiting Nurse Association's
AIDS project, which provides assistance to persons with HTV/AIDS in accessing private
and public benefit/entitlement programs as well as housing subsidies and support services
to obtain long-term housing; VNA provides individual counseling, case ihanagement and
psychosocial assessments to assure stable housing as well as short term emergency
assistance with rent and utility expenses.
Emergency Shelter Grant Funds
Of the $443,000 in ESG funds awarded to the City for the upcoming fiscal year,the funds will be
allocated as they have been for the past four years: 70% for shelter operating costs ($310,100)
and 30% for support services ($132,900). A committee comprised of staff from the Department
of Housing, the Department of Parks, the City Attorney's Office, the Mayor's Office, the County
of Santa Clara's Homeless Coordinator, the Santa Clara County Office of Human Relations, and
a homeless or previously homeless person, reviewed the proposals for funding and recommended
awards. The program selection priorities were as follows: •
1. Up to 20% of the funds will be set-aside for the County's Cold Weather Shelter Program at
the Emergency Housing Consortium Reception Center.
2. Remaining funds will be available to existing shelters, day care centers, and service providers
having extraordinary needs for assistance in paying utilities, insurance, rent, etc. Emphasis
will be given to those agencies that attempt to coordinate their services with other shelter and
service providers.
The committee's recommendations reflect a commitment to ensuring that agencies that provide
actual shelter will receive priority for funding, given that the need is great. Additionally, at the
recommendation of the committee, the Housing Department will be establishing more stringent
standards for reporting reasonable and measurable outcomes to ensure that these limited fiinds
will continue to be allocated to those agencies that demonstrate exceptional performance.
t;
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
12
The following table depicts the recommended allocations for FYOl/02: To-be-updated
Emergency
Housing for the Cold Weather Shelter Program to provide for $85,000
Consortium
$66,750
transportation, meals, referrals and services
Sacred Heart Community Center for rent^ and motel assistance to families who are $75,000
$58,250
homeless or are at-rlsk of becoming homeless
Unity Care Group
to provide for staff and rent costs
$25,000
0^
Montgomery Street
for maintenance and operation expenses of the
$60,000
$45,000
for maintenance and operation expenses of the Da.y $40,000
$29,750
shelter
Georgia Travis Day Center
Center
for maintenance and operation expenses of the $35,000
Commercial Street
$25,500
shelter
Next
Door: Solutions
Domestic Violence
Homeless Care Force
to to provide food for the clients and to pay for food, $45,600
shelter maintenance and utilities
$35,253
to provide food, general expenses related to food $64,988
operations, and clothing wd personal hygiene
$34,000
items to homeless street people
Concern for the Poor
for maintenance and operation expenses of the $56,820
$48,297
Family Shelter
Community
Technology to pay for ongoing costs associated with Project $38,000
S.H.A.R.E., the shelter hotline, and other
Alliance
$27,200
programs for the homeless
for maintenance and operation expenses of the $30,000
Bill Wilson
$20,000
shelter
St. Vincent de Paul
for rental and motel assistance to families vvho are $30,000
$17,000
homeless or are at-risk of becoming homeless
Loaves and Fishes
to provide food to the homeless
$12,000
02
Unity Care Group
for transitional.shelter for six to ten youths
$25,000
03
Unity Care Group
for a supplemental program that provides safe and $80,520
04
confidential shelter for battered women and their
children
Tending The Flock
to provide food and food vouchers
Volunteers of America
to provide, food, lodging and case management $44,000
$2,000
05
$13,000
services
City ofSan Josd
to provide emergency services to the homeless such $25,000
as bus passes and emergency hotel vouchers
$25,000
11445,000., ■
7
Unity Care was notfunded because their proposal did not meet the minimum criteria with respect to providing shelter.
Loaves and Hshes was not funded because they are a new agency seeking funding and the Committee determined that, since total ESG
funding
was the same as last year,it was unable to fiind new activities.
Unity Care was notfunded because this project is not for emergency housing.
^ Asian Ameiican was not funded because they are a new agency seeking fimding and the Committee determined that it was unable to fund
new activities.
^ Tending The Hock's application was incomplete.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
13
The amount of matching funds provided by the City for the ESG progr^ has; in the past, at least
equaled and usually exceeded the amount of the grant from the federal government. The City's
match may not include amounts that have been counted as an ESG match previously, hi gener^,
the City matches the ESG funds with funds from the City's Housing and Homeless Fund.
Homeless Prevention Activities
The following additional actions to address the housing needs of the homeless and special needs
are proposed for the coming year:
1. The City has a Rental Assistance Program, which offers a one-time monetary assistance for
people who are at-risk of becoming homeless. This program has been beneficial to several
thousand individuals and families on the Verge of becoming evicted. The City will continue to
support tWs program, and increase the funding if needed..
2. The City offers move-in costs to individuals and families who are moving to permanent housing.
3. The Welfare- to-Work program provides tenant-based Section 8 rental assistance to help eligible
families make the transition from welfare to work. This program hais many steps that a voucher
recipient has to follow: self-identification for the welf^e to work voucher program. Initial
screening orientation for the program, verification of eligibility, workshops,,counseling, and
housing search activities, and employment plans for prospective program participants. Housing
screening committee, sign the Welfare-to-Work Housing Contract, apply for;housing assistance,
housing search, and finally sign-up for the Family Self-Sufficiency Program. These steps are
intended to prepare people to enter back into the workforce and become self-sufficient.
Other Programs to help in the transition to permanent housing
The City will continue to fund shelters that provide counseling and other case management
assistance to prepare individuals and families for the transition from emergency and transitional
housing to permanent housing.
Several of the shelters in San Jose provide case management, and preparation courses such as
resume writing, skills training, financial planning, parenting, and many others. These courses
provide a foundation on which people can begin a new life. The City funds many of these
shelters, and will continue supporting them and encouraging them to be innovative and
reinventive in the development of their courses;
City ofSan Jose
Consolidated Plan
One-Year Action Plan,2001
14
OTHER ACTIVITIES
Based on the findings of the two studies conducted on the housing needs of persons with
disabilities and seniors, the following additional activities are proposed:
Seniors
1.
Investigate opportunities for market rate congregate or life care housing through zoning
and planning policies. Department ofPlanning, Building and Code Enforcement
2.
Determine whether existing density bonus policies could be made more effective in
encouraging the development of market rate senior housing. Department of Planning,
Building and Code Enforcement
3.
Continue to collaborate with Project Match on finding a suitable site to house homeless
seniors in permanent housing. Department ofHousing
Disabled
1.
Continue to .seek projects that provide group housing for persons with disabilities to
maximize options that provide residents with their own bedrooms. Department of
Housing
2. ■
The City will work with other agencies to develop more outreach services for the
hardest-to-serve homeless population. Department ofHousing
3.
The City will continue to work with Housing Choices Coalition to meet their needs in
helping persons with disabilities. Department ofHousing
4.
The City will finance the rehabilitation or assist in obtaining financing for Casa Feliz to
provide housing for persons with mental disabilities. Department ofHousing
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
15
OTHER ACTIONS
J
Public Policies
In addition to its production objectives, the City is strongly committed to improving the
affordable housing delivery system. Some policy actions in this year's plan include efforts begun
last year which require further analysis, as follows (responsible parties shown in italics):
1.
Continue implementation of a community education effort for affordable housing.
Department ofHousing
2.
Complete a study of the feasibility of creating a housing trust fund that would provide
an ongoing, dedicated source of revenue for affordable housing efforts, such as a
General Obligation(GO)Bond. Department ofHousing
Institutional Structure
In the upcoming year, the following actions will be undertaken to improve the delivery system
and eliminate identified gaps in the institutional structure:
1.
Continue to apply for federal and State funds to maintain and increase funding for
affordable housing projects. Department ofHousing
3.
.
Continue to seek solutions to address federal regulatory barriers to the production and
rehabilitation of affordable housing (e.g., cost-prohibitive relocation benefits required
by federal regulations). Department ofHousing, Office ofIntergovernmental Relations,
City Council
4.
Continue to prepare Neighborhood Improvement Plans as part of the Strong
Neighborhood Initiative (SNI). Areas include 13*^ Street, Five Wounds/Brookwood
Terrace, East Valley/680 Coiiununities, Mayfare, Spartan/Keyes, Burbank/Del Monte,
Tully/Senter, Winchester, Whaley, Josepha/Auzerais, Gardner/Aflanta. The plans will
seek strategies to renovate existing homes and to provide opportunities to identify infill
sites.
Continue to update existing Neighborhood Revitalization Plans. As part of the process,
staff will continue to look for new housing opportunity sites. Areas include Santee,
University, Washington, Rockspring, and Edenvale/Great Gala. Department of
Planning, Building and' Code Enforcement, Department of Parks, Recreation and
Neighborhood Services, Department of Housing, Police Department, and other City
departments,
5.
Continue coordination with and assistance to the San Jose Neighborhood and Housing
Services. Department ofHousing
6.
Advocate changes in federal laws to improve San Jose's position in applying for scarce
public dollars. Department of Housing, Office of Intergovernmental Relations, City
Council
City of Sati Jos6
Consolidated Plan
One-Year Action Plan,2001
16
7.
Continue implementation of the Alviso Community Plan to address land use, economic
developnaent, affordable housing, and other issues to enhance and protect the existing
character of the area, including the existing affordable housing stock. Department of
Planning, Building and Code Enforcement, Department of Housing, Department of
Parks, Recreation and Neighborhood Services, and other City Departments
8.
Continue to Implement a first-time homebuyer program for teachers. Department of
Housing
9.
Develop processes and procedures to maximize the delivery of housing services and to
improve coordination between various City Departments as part of the City Council's
direction to increase production by 50%. As part of this, continue implementation of a
Housing Action Team (HAT), made up of staff from various Departments, to facilitate
the development of affordable housing.
Department of Housing, Department of
Planning, Building and Code Enforcement, City Attorney's Office, Department of
Parks, Recreation and Neighborhood Services, Department of Public Works, Fire
Department, and other City Departments
10.
Implement an aggressive program to acquire suitable surplus sites to help meet the
increased production goals in the future. As part of this, the City will m^e it a priority
to use City surplus land for affordable housing purposes as appropriate. Department of
Housing, Department of Public Works, Department of Planning, Building and Code
Enforcement, City Attorney's Office, Department of Parks, Recreation and „
Neighborhood Services, and other City Departments
11.
Continue to identify vacant and underutilized parcels, particularly along TransitOriented Development Corridors, suitable for higher density and/or mixed-use
development as part of the Housing Opportunity Study. Department of Planning,
Building and Code Enforcement
12.
Expand Rehabilitation Program in Strong Neighborhoods. Department of Housing,
Redevelopment Agency
13.
Increase Predevelopment funding for nonprofit developers. Department of Housing,
Budget Department
14.
Review Inclusionary Zoning and possible development of ordinance. Department of
Housing, Department ofPlanning, Building and Code Enforcement
15.
Work with San Jose State University on joint projects for housing. Department of
Housing, Redevelopment Agency
16.
Reanalyze assumption that housing is not paying its fair share of taxes, and analyze
feasibility of using industrial sites for affordable housing development. Department of
Planning, Building and Code Enforcement
17.
Explore the use of air rights above publicly owned properties. Department ofPlanning,
Building and Code Enforcement
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
n
Fair Housing
1. .
Complete an Analysis of Impediments to Fair Housing, including recommendations for
further action. Department of Housing, Department of Parks, Recreation and
Neighborhood Services,fair housing service providers, and others involved in this issue
2.
Complete a Countywide Fair Housing Needs Assessment. Department of Housing,
other entitlementjurisdictions in the County ofSanta Clara
Lead-Based Paint Strategy
The Department of Housing has updated its policies and procedures to conform to the Final HUD
Regulation on Lead-Based Paint Hazards that was supposed to become effective September 15, 2000,
but was extended to March 15,2001. The new regulation is contained in 24 CFR Part 35.
The new regulations require that any HUD-funded project exceeding $5,000 must include measures to
make the entire dwelling "lead-based paint safe." This requirement significantly affects the costs,
timeframes, and processes in which rehabilitation projects are administered by the Housing Department.
All residential buildings constructed before 1978 may contain lead-based paint. The neighborhoods
identified in the "Strong Neighborhoods Initiative" target areas are predominately pre-1950 indicating an
extremely high likelihood of lead-based paint contamination. Any work where lead-based paint (or
presumed lead-based paint) will be disturbed falls under the new regulations. The amount of Federal
funding per project also dictates at what level the problem(s) are to be addressed ($5,000 or less, over
$5,000 but less than $25,000, and over $25,000). Again the age and condition of the dwellings within
the SNI neighborhoods would indicate that the majority of rehabilitation projects will exceed $25,000,
thus falling under HUD's most stringent category for lead based paint.
Li support of the" govemment's goal of eliminating lead-based paint hazards in housing, the Housing
Rehabilitation Program has been testing all pre-1978 projects for lead-based paint, whether or not federal
funds are used. Through this testing (and remediation), San Jose has begun to develop an accurate
database of dwellings with lead-based paint hazards'and data which will help staff,determine the scope
of the problem on a city-wide basis. For the fiscal year ending June 2001, San Jose will have spent
approximately $125,000 in its efforts to identify and eliminate hazards associated with lead-based paint
in residential structures.
Public Housing
The Housing Authority of the County of Santa Clara, utiUzing federal HUD funds allocated for
the County of Santa Clara, built and manages 4 conventional (public housing) buildings, two of
which are for Seniors and persons with disabilities, and the other two are family units. The four
sites comprise of 234 public housing units, for which the Housing Authority provides on-site
management, maintenance and landscaping services. The public housing wait Ust has over 5000
names on it.
Section 8
City of San Jose
Consolidated Plan
One-Year ActionPlan,2001
18
The Housing Authority, in partnership with the County Social Service Agency, received 1066
vouchers, targeted to people on the Section 8 wait list who are currently receiving TANF
(Temporary Aid to Families in Need), qualified by income to receive TANF, or have received
TANF services in.the past two years. The program provides case management, workshops,in
money management, landlord/tenant law, and other supportive services. In order to receive and
keep the voucher, a family must be employed or in training to become employed. As of 2/22/01,
968 families had secured housing. It is anticipated that this set aside funding will be fully utilized
by March 15,2001.
The Housing Authority also anticipates on receiving an allocation of.1200 vouchers to be used
throughout the City and County on a first come,first serve basis. The current wait list for Section
8 has 24,975 names on it. Approximately 800 vouchers have been issued for this allocation to
date. An application for 1000 new vouchers was submitted in January, 2001.
The Housing Authority also received 100 vouchers for Main Stream funding, set aside funding
for persons with disabilities. This was the second allocation for this program received by the
Housing Authority. All of these vouchers have been utilized.
The Family Unification Program consists of ah allocation of 250 vouchers intended to be used by
families with an Open welfare case that are in danger of losing their children due to lack of
housing. Approximately 166 of these vouchers are being utilized with the balance to be issued by
June30,2001.
Section 8 project- base funding may be available for landlords who are willing to provide
housing units for families who qualify for vouchers or families who have vouchers, and are
looking for a unit. Information about project-base opportunities vvill be available by June 1,2001.
Federal regulations for the project- base program are being finalized as of February,2001.
Section 8 Homeownership
The tenant may use section 8 Housing Assistance Payments to purchase a home. The Housing
Authority intends to administer a pilot program targeted to the participants of the Family Self
Sufficiency Program. The program will be implemented after July 1,2001.
Affordable Housing
The Housing Authority of the County of Santa Clara recently opened a new complex, Helzer
Courts Apartments (155 Family units) by using a variety of financial resources, including funds
firom the City of San Jose Housing Department. Land has been purchased to build a 125-unit
complex for Senior citizens in SW San Jose. 47 Units of Family housing were purchased and
rehabilitated in central San Jose. The rents are affordable in all complexes. The Housing
Authority has built/ rehabilitated and manages 12 complexes for families, persons with
disabilities and seniors in the City of San Jose. The wait list for Housing Authority affordable
units throughout the County is approximately 41,000 persons or families^
■- /
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
19
PROGRAM - SPECIFIC REQUIREMENTS
CDBG
AVAILABLE FUNDS-FYOl/02
It is expected that total funding in the amount of $15,996,000 will be available in FYOl/02
consisting of $12,996,000 from the City's 2001 Entitlement grant, $1,500,000 in projected 2001
program income, and $1,500,000 in prior year funds.
Projected Use of Community Development Block Grant Funds for the First of Three Years-FY
01-02
/
The following section outlines the City Administration's recommendation submitted to the
CDBG Steering Committee on projects proposed to be implemented with the funds available in
2001-2002.fiscal year. During this one-year period, the City proposes to utilize 99% of these
funds to serve low and moderate-income persons.
In FYOl/02 San Jose proposes to establish a reserve of $100,000 for a contingency reserve for
cost overruns and/or later programming. San Jose proposes to allocate 15% of the entitlement
funds and $225,000 in prior year funds to human service and housing projects administered by
community based organizations. Eighty-five percent 85% of entitlement funds, all 2001 program
inconie and the remaining available funds are proposed to be allocated for community
development improvements including housing rehabilitation, fair housing, capital improvements,
code enforcement and small business assistance. The proposed allocation of available funds by
category is as follows:
(
CONTRACTUAL COMMUNITY SERVICES
PUBLIC SERVICES(14%)
COMMUNITY DEVELOPMENT IMPROVEMENTS
FAIR HOUSING(3%)
PROGRAM ADMINISTRATION AND PLANNING(14%)
HOUSING IMPROVEMENT PROGRAM(21%)
ECONOMIC DEVELOPMENT(4%)
CODE ENFORCEMENT AND INTERIM ASSISTANCE(16%)
Pi^SICALIMPROVEMENT PROJECTS(27%)
RESERVE (1%)
CONTRACTUAL COMMUNITY SERVICES fCCSJ CATEGORY
Within this category,$1,949,000 in Entitlement funds and $225,000 in prior year funding is
allocated to public service projects. All projects serve low and moderate-income persons on a
citywide basis. Programs marked by an asterisk are also receiving funding from the City's
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
20
General Fund.
PUBLIC SERVICES(15% of Available Funds)
ALLIANCE FOR COMMUNTTY CARE
Community Support Recreation ($21,000)
Projects provide recreational and support activities to adult residents of San Jose with
persistent mental illnesses. Services include support groups, educational presentations,
recreation activities, self-help activities, outreach and coordination with mental health
treatment staff.
BILL WILSON MARRIAGE & FAMILY COUNSELING CENTER
Runaway and Honieless Youth Shelter($40,000)
Project provides a range of services for runaway and homeless youth and their
families including food, emergency shelter, individual and faimly counseling,
recreation activities, medical care and education services.
CATHOUC CHARITIES OF SAN JOSE
Shared Housing ($80.000)
Project involves providing information and referrals to San Jose residents about affordable housing
opportunities through home sharing.
YES' Young Women's Empowerment Project($66,743)
The project fosters the healthy development of young women to prevent teen
pregnancy and dating violence. The project uses a multi-level approach. Which
includes support groups, peer education/mentorship, career/educational
development workshops, mother daughter-activities and individuals to carry out
project activities.
HOUSING AUTHORITY OF THE CITY OF SAN JOSE
Family Self-Sufficiencv ($30.089)
Project assists families in subsidizing housing to achieve economic self-sufficiency by
linking them to training and employment retention support services.
COMMUNITY TECHNOLOGY ALLIANCE
Project Share($21.069)
The project provides communication tools as supportive services to homeless and at-risk
individuals seeking shelter, permanent housing,employment and community voicemail.
CONCERN FOR THE POOR
Case Management($29.400)
Project provides case management to homeless families with children. The project's goal
is to assist families in removing barriers to self-sufficiency. . Services includejob
counseling,referrals to educational programs basic computer skills, help with money
management and general counseling as needed.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
21
CROSS-CULTURAL COMMUNITY SERVICES CENTER
Youth Employment Services and Placement($43,000)
Project provides limited English proficient youth ages 16-21, with 12 weeks of
employment readiness skills and computer training in three non-repetitive cycles a year.
r»n
A r. A tt
i u & Communitv SupportCOMMUNITY,
ADVOCACY,AND REFERRAL AGENCY
UCARA
Health
Services
07^^
The project provides health, benefit and daily living services to deaf, deafened, deaf-blind
and hard-of-hearing persons. Clients receive services in ASL or the communication
mode most usable by them. .
EMERGENCY HOUSING Consortium(EHC) 5
H.O.M.E.S.($61,000)
The project provides extensive housing location assistance, life skills training,
enaployment services and informational resources to help homeless San Jose residents
gain and maintain permanent housing and stability. .
ETHlpPlAN COMMUNITY SERVICES
Ethiopian Communitv Center
oai)
Project provides translation/interpretation, outreach and counseling services to
low/moderate individuals/families residing in the City of San Jose to become selfsufficient.
nUPlNO-AMERlCAN SENIOR OPPORTUNITY DEVELOPMENT COUNCIL,
Northside Communitv Gp.ntp.r
Project provides services catered toward helping seniors overcome language barriers,
obtain Veterans Benefits, entitlements,income maintenance and others.
FRIENDS OUTSIDE IN SANTA CLARA COUNTY
School Advocate Proiect($30,000)
The project provides a variety of services to youth between the ages of7 and 14 with AD/HD
or other learmng disabilities, which are causing problems at school and home. The
project also provides services to parents to help them understand and assist with the
challenges their children are experiencing.
INNVISION
Cecil White Cp.ntp.r r$d7 nno)
Project provides homeless people with essential services,employment readiness
training,job search and placement, case management, basic medical care, mental
health referrals, substance abuse assessment, education,counseling and computer
training.
MianStreetlnn ($25,000)
The project provides direct services to homeless and severe mentally ill persons. The
project links these persons to service providers, volunteers and government agencies in
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
22
the community to meet the multiple needs of this population.
Community Inns ($24.000)
Project provides 15 shelter beds at community churches on a rotating basis,three meals
per day, case management and supportive services to homeless people. A caseworker
works with the homeless person to identify, obtain and retain employment in the
community and link them to comprehensive support services.
LEGAL AID SOCIETY OF SANTA CLARA COUNTY
T ^ipal Aid Society Housing Counseling($139,285)
The project provides counseling,legal assistance and landlord seminars to address
housing related problems.
,
'
LIVE OAK ADULT DAY SERVICES
Senior Adult Day Care/Resnite ($29,483)
The project provides a specialized program of Adult Day Care to enrich the quality of life
of disabled seniors by providing them with socialization opportunities to assist in
preventing or delaying institutionalization.
LOAVES AND HSHES FAMILY KITCHEN
Loaves and Fishes Project($20,000)
The project serves no cost hot meals five days a week to low-income persons.
MEXICAN AMERICAN COMMUNTTY SERVICES AGENCY
Casa MACSA Adult Dav Health Services ($30,911)
The project provides comprehensive day care and rehabilitative services for frail and
elderly adults.
MACSA Youth Center Services($$144,900)
The project provides education,recreation, employment development and mental health
services for youth ages 6 to 18.
Youth Opportunities Unlimited($147,000)
The project provides service programs such as academic support, computer literacy, art,
recreation and social development for low/moderate income students.
NEXT DOOR SOLUTIONS TO DOMESTIC VIOLENCE
Shelter Next Door($80,000)
The project provides intensive case management, advocacy, counseling, support groups,
educational workshops, parenting support and legal services for victims of domestic
violence and their children. Children are provided with educational advocacy, support,
counseling and recreational opportunities.
OUTREACH
ESCORT
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
23
Special Needs Transnortatinn ($46,000) .
prqject provides door-to-door transportation to frail seniors and disabled adults.
founds from the projett will be used to subsidized .35 cents of the $2.50 per ride fare
charged.
^
PORTUGUESE ORGANIZATION FOR SOCIAL SERVICES & OPPORTUNITIES
Minority Senior Service Providers Consortiiim ($126,028)
The project will provide wellness and recreational activities, respite senior day
care se^ices,language assisted transportation, escort, social services information
referrals and immigration services to limited English speaking seniors in the City.'
PROJECT MATCH
Senior Citizen Hou.sing Match/Homelessness Preventinn /.1:Q7 nnm
The project "Matches" seniors offering a room in their home (Providers) with
individuals who need a room to.rent(Seekers).
respite,researchfor ALZHEIMER'S DISEASE
Alzheimer's Activity Center($30,000) ^
The project provides therapeutic activities and activities of daily living to extremely low-
and low moderate-income seniors suffering Alzheimer's Disease and related illness. The
therapeutic activities include encouraging physical mobility, enhance and use of cognitive
skills. Additionally, the project provides assistance in the areas of nutrition, personal
hygiene and stability.
.
,1^
m
SACRED HEART COMMUNITY SERVICES
Comprehensive Services Prnjp.rt($25,000)
Project provides emergency food boxes,sack lunches,employment placement,clothing
and information and referral service for low-income persons and families.
SAN JOSE FIRST UNITED METHODIST CHURCH
San Jose First Commimitv ServicRs($19,000)
Project provides outreach programs such as basic human needs, vocational and
employment
development,rental assistance and emergency reUef to homeless and very
low-income families of San Jose.
SANTA CLARA COUNTY ASIAN LAW ALLIANCE
Asian Law Alliannp
nno)
..
The project provides multilingual and culturally sensitive legal counseling and
preventative community education services to low-income residents of San Jose. The
project has two components: legal services and community education.
MEOT^HEALTH ADVOCACY PRJECT OF THE LAW FOUNDATION OF
SILICON
Residential Care Ombudsman ($24,000)
City ofSan Jose
Consolidated Plan
One-Year Action Plan,2001
24
The project assists persons with mental and developmental disabilities in
resolving legal problems in residential care housing and independent living such
as evictions, substandard living conditions, verbal, physical and financial abuse.
SANTA CLARA/SANTA CRUZ COUNTffiS COUNCIL OF CAMP FIRE
Camp Fire Teen Leadership Corp.(TLC)($31,614)
„
The project recruits teenagers from low-income neighborhoods identified as "at risk" of
dropping-out of school and into g^gs and substance abuse and trains them to become
teachers,role models, and mentors for younger chilcten. The project provides the support
system for these persons needed to help them stay in school, stay employed, and access if
necessary to social services needed to help them h^dle personal or family problems.
SANTA CLARA UNIVERSITY
East San Jose Communitv Law Center($27,000)
The project assists low-income people to understand and enforce their legal rights in
employment, immigration, and consumer matters through group workshops, drop-in
Clinic interviews, and individual representation and community education.
SANTA CLARA VALLEY BLIND CENTER
Blind and Visuallv Impaired Client Services Deliverv($27,000)
The project provides social, recreational and educational programs for tlie blind and
visual impaired. The project provides information regarding products for the visually
impaired,financial information,transit information, educational opportunities and
referrals to other social service agencies.
SECOND HARVEST FOOD BANK
Operation Brown Bag($18,000)
The project is a.self-help program that assists very low-income seniors with their food
needs. Through this project seniors receive a bag of groceries each week at various City
locations.
SENIOR ADULT LEGAL ASSISTANCE(SALA)
T.epal Assistance to Elders($88,000)
The project provides free legal services to elderly clients through on-site appointments at
twelve San Jose senior centers.
SERVICES FOR BRAIN IMPAIRED (SBl)
Continuum Of Care($20,000)
The project provides rehabilitative services such as day treatment, assessment, case
management and information/referral to severely, traumatically brain-impaired survivors.
SnJCON VALLEY INDEPENDENT LIVING CENTER(SVILC)
Housing Prnpram for Persons with Disabilities ($10,000)
This project is a housing referral/advocacy/placement service that addresses the special
housing needs of persons with disabilities.
'■
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
25
SUPPORT NETWORK FOR BATTERED WOMEN
Services for Battered Women and Children ($40,000)
The project provides a support network for battered women and their children. The
project provides bilingual service, a 24- hour toll free crisis hot line, emergency
shelters, legal advocacy and counseling for women and children.
VIETNAMESE VOLUNTARY FOUNDATION
'
Vietnamese Elderlv Services Senior r!p.ntp.r($60,000)
The project works to enhance the quality of life for elderly adults of Umited
English proficiency. Services include ESL/Citizenship classes, case management,
field trips, recreation activities; health services interpreting and translating
services.
Vietnamese Youth Gang Prevention/Intervention Program ($21,250)
The program consists of SAGE/school-based counseling, mentoring, support
groups and recreational activities,
WOMEN AND THEIR CHILDREN'S HOUSING(WATCH)
WATCH($33,000)
The project provides a safe living environment for victims of domestic violence and a
system^of support services that includes therapeutic interventions, case management,
recreation, mentoring and educational support.
YWCA IN SANTA CLARA VALLEY
YWCA Child Carp. r.1;i
As part of a nine non-profit childcare consortium,the project provides high quality
subsidized childcare services at fifteen sites throughout San Jose. The project also
provides coupeling, assessment of children, short-term intervention, parent workshops
and information and referral services.
COMMUNITY DEVELOPMENT IMPROVEMENTS fCDD CATEGORY
WiAin this category, a total of$11,047,000in 2001-2002 entitlement funds,$1,500,000 in
antidpated 2000 program income,and $1,275,000 in prior year funds is available for housing
rehabilitation,fair housing, capital improvements,code enforcement and small business
assistance programs. All projects serve low and moderate-income persons and are Citvwide
unless noted.
FAIR HOUSING PROTF.CTS(3%)
LEGAL AID SOCIETY OF SANTA CLARA COUNTY
Legal Aid Society Fair Housing PrniRct($150,000)
provide 24 free Fair Housing Seminars at various locations throughout
City of San Jos6
Consolidated Plan ,
One-Ye^ Action Plan,2001
26
SAN JOSE FAIR HOUSING CONSORTIUM
Fair Housing and Enforcement Services($307.274)
The project provides comprehensive fair housing education,investigation an
enforcement services.
PROGRAM AT>MTNTSTRATTnN AND PLANNING(16%)
DEPARTMENT OF PARKS,RECREATION AND NEIGHBORHOOD SERVICES
fDRG Profn-am Development & Monitoring($1,112,273) ,
The project provides program development/evaluation,project
implementation/monitoring and technical support in managing 100 projects per
year.
Strong Neighborhoods Initiative(SND Organizing and.Implementation Team
£$320 227)
The project is a partnership of the City of San Jose,Redevelopment Agency and
the community to build, clean, safe and attractive neighborhoods with strong,
independent and capable neighborhood organizations.
Theraneutic Recreation & Welluess Facilitv Pfp-Dftvelopment Studv ($200,000)
The project consists of initiating a pre-development study to address the need for a
centralized recreation and wellness facility for persons with disabilities. The study will address
site location,facility design and development of-architectural drawings.
DEPARTMENT OF PLANNING,BUILDING & CODE ENFORCEMENT
Environmental Review of CDBG Proposals($72,770)
The project consists of research of all potential environmental impacts for CDBG project,
including fieldwork, analysis and documentation of each project's consistency with
NEPA standards for each impact category.
Neighborhood Revitalizatioh Program ($348,469)
The project has two parts: Neighborhood Revitalization Plan Preparation and
Neighborhood Revitalization Plan Coordination. The Plan Preparation component
consists of preparing several comprehensive community-based revitalization plans in
troubled low/moderate income neighborhoods. The Plan Coordination component
coordinates,implements and monitor existing and future neighborhood revitalization
plans.
DEPARTMENT OF FINANCE
Accounting for CDBG($169,172)
r«-om
The project provides financial administration and record keeping for the CDBG program.
HOUSING IMPROVEMENT PROGRAM(24%)
City of San Josd
Consolidated Plan
One-Year Action Plan,2001
27
ECONOMIC & SOCIAL OPPORTUNTIIES(ESO)
Housing and Energy Services Propram ($600,000)
The project assist low/very low income persons of San Jose by providing services such as
e identification and correction of hazardous and unsafe conditions, providing safety
inspections and testing, performing lead paint hazard screening and education and minor
home repairs.
DEPARTMENT OF HOUSING
Housing Rehabilitation r.1;?.
The project provides low-interest and deferred loans to low-income borrowers and loans
to rental property owners to improve their properties occupied by low - moderate-income
households.
COMBINDED ADDICTS AND PROFESSIONAL SERVICES(CAPS)Vermont House($320,000)
The project involves acquiring two residential structures serving as transitional housing
tor 2o extremely low-and very low-income persons.
ECONOMIC DEVET.OPMF.nt
DEPARTMENT OFPARKS,RECREATION AND NEIGHBORHOOD SERVICES
San Jose Smart Start Familv Child Carp.($218,550)
The project consists of expanding early childhood development/child care spaces
creating new businesses and filling vacant spaces in existing businesses.
OFFICE OF ECONOMIC DEVELOPMENT
Revolving T^an Fund Kxnansioh ($50,000)
The project consists of creating and retainingjobs for San Jose residents,
increasing investment in blighted areas and vacant facilities, developing'
businesses operated by economically disadvantaged residents.
SANTA CLARA UNIVERSITY
Small Business Consulting Group("SBCn")^$'77 nno)
The project consists of expanding support beyond legal services to include
usiness related services to assist low-income persons interested in starting or
developing their own small businesses. Project will provide financial planning
marketing and business strategies to enhance the opportunities for low-income'
entrepreneurs to succeed in achieving economic self-sufficiency.
snjcoN vXlley economic developm^(sved)corporation
Small Business Institute/ Business Assistance Center($263,287)
The project provides pnerd business assistance, technical assistance,loan
packaging and financial assistance to low-income residents starting up businesses
that will create new jobs,
Entrepreneurshin Training Program ($72,528)
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
28
This project will provide training for entrepreneurs who will then create jobs for lowincome persons. Along with entrepreneur training the project will also provide business
plan development and one-on-one business development mentoring.
CODE ENFORCEMENT AND INTERIM ASSISTANCE(18%)
DEPARTMENT OF PLANNING,BUILDING & CODE ENFORCEMENT
Cnmrnnnitv Improvement Program (CIP)($487,535)
The project consists of preserving and improving the quality of existing affordable
housing units in low-income neighborhoods through enhanced code enforcement
inspection services. The project utilized owner and tenant education and neighborhood
beautification projects to improve low-income neighborhoods.
Concentrated Code Enforcement Program(CCEP)($779,626)
The project consists of preventing or eliminating slum and blight conditions in targeted
low/moderate income areas in San JOse. The project uses a systematic proactive
inspection and application of code enforcement code to correct he^th and safety
violations.
Np-iphbnrhood Action Center(NAC)($470,327)
The project consists of providing Code Enforcement services to two Project Crackdown
areas and two Neighborhood Action Centers.
Project Crackdown ($542,293)
The project consists of providing law enforcement services,improving the
physical conditions of neighborhoods through Code Enforcement activities.
Community Organization and education and outreach.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
29
SAN JOSE CONSERVATION CORPS.
Corps Community Pmients r*!;? i ^
This project,consists of improving the appearance of neighborhoods through
hedth and safety activities and clean up activities. Services included in this
project also pertain to fire hazard reduction, repairing fences, disposal offurniture,
re-landscaping, park rehabilitation design and installation ofirrigation system.
PHYSICAL TMPROVEMRNTS(33%)
BOYS & GIRLS CLUBS OF SILICON VALLEY
Eastside Clubhouse Capital Proiect($750,000)
The project involves building a new community ball field and renovating an outdated
5,000 square foot clubhouse.
DEPARTMENT OFPARKS,RECREATION AND NEIGHBORHOOD SERVICESb"'& Bester
Park Site Development t'SO nnn)
The project consists of developing a neighborhood park to serve the Spartan/Kevs
neighborhood.
Anti-Graffiti Program ($442,010)
The project consists of decreasing the presence of graffiti blight in San Jose through
pronapt removal of graffiti from both public and private property with an emphasis on
low-income areas.
Guadalupe-Washinptnn Allev Reconstruction
nnm
The project consists ofimproving the function, appearance and safety of an alley in the
Guadalupe-Washington area. The improvement will consist of redesign and reconstmction of the
Alley,
Roosevelt Roller Hockev Rink Renovatinn r.tipn? nnm
The project consists of renovating an existing roller rink.
DEPARTMENT OFPLANNING,BUILDING & CODE ENFORCEMENT
Walnut Grove Area Site Improvement Proiect TT($820,000)
The project consists of reconstructing two private driveways and parking areas behind
fourplexes in the southern (Dubert Lane) and eastern (Crucerro Drive) portions of the
Walnut Grove area of Santee neighborhood.
DEPARTMENT OFPUBUC WORKS
Mavfair Streetlights Phasp. TTT($200,000)
The project consists of modifying the present lighting system in parts of the Mayfair
Improvement Initiative area.
Proiect Crackdown Strpp.t Lightening($120,000)
^e project consists of modifying the present lighting system in parts of Project
Crackdown areas.
City of San Jos6
. Consolidated Plan
One-Year Action Plan,2001
30
EMERGENCY HOUSING CONSORTIUM
Transitional Housing Rehabilitation Project Phase E($204,000)
The project consists of renovating two buUdings serving as transitional housing units at 1089
North Fifth Street and 282E. Younger Street.
HOUSING FOR INDEPENDENT PEOPLE,INC.(HIP)
Disabled Housing Preservation ($211,920)
The
project consists of preserving 25 units pf affordable housing, by way of
rehabilitation, occupied by low-income persons with disabilities.
MEXICAN AMERICAN COMMUNITY SERVICES AGENCY,INQ.
MAPS A Enrichtnent and Dp-ve1opment Center($495,000)
.. ,
The project consists of rehabiUtating a donated residence and adjacent building for office
space to be used for youth service programs.
SAN JOSE DAY NURSERY
. Nurserv Renovation Project($194,000)
,
The project consists of pre-construction steps to rehabilitate an 84-year old building used
for child development services.
YWCA IN SANTA CLARA VALLEY
Franklin-McKinlev School District Child.Care ($575,830)
The project consists of installing two modular buildings at two school sites in the
Franklin McKinley School District: Robert F.Kennedy and George Shirakawa Sr..
RESERVE(1%)
An operating reserve of $100,000 is proposed.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
31
HOME PROGRAM FUNDS
A total of$4,317,000 is available,to be used for a variety of housing-related activities.
New Construction ^ Given the, current and projected shortage of affordable housing, new
construction of affordable housing units is the City's highest priority for housing assistance. The
HOME funds for property acquisition and construction of rental units for
and U households and special needs populations such as single parents, seniors the
HIV/aids and people at risk of homelessness. Participation in the
HOhffi Program will enhance the City's funding sources for new construction, at the same time
providing greater flexibility in determining the use of funds in our overall gap-financine
program.
^
Homeo^emhip - The need to assist low-income qualifying households in purchasing singleamily housing is a high priority that the City proposes to meet by utilizing HOME funds for
assistan^ with down payment, closing costs or gap financing by providing subordinate City
loans. The complete program guidelines are available for public review at the City of San Jose
Housing Department.
Planning and Administrative Costs - Ten percent of the total allocation (or $431,700) will be
used forpanning and administrative costs associated with administering and managing activities
assisted by HOME funds by the PJ.
Included in admnistrative cost is a proportionate amount to be paid for a consultant who will
produce a Fair Housing Study. This study, mandated by HUD, is being undertaken in
conjunction with all entitlementjurisdictions in the County of Santa Clara.
Conmunity Housing Development Organizations - In compliance-with HOME statute and
regulatioi^, the City of San Jose will set aside a minimum of 15%(or $647,550)for Community
Housing Development Organizations(CHDOs)to carry out HOME-eligible activities.
An additional 5% (or $215,850) may be used to support operating expenses of CHDOs working
Sor^bleS^ny^
necessary to allow the developer to proceed with their plan to provide
Most of the nonprofit housing developers with whom the City has worked in the past do not meet
the federal defimtion of a OIDO. SpecificaUy, these nonprofit organizations need to satisfy the
requirement for maintaimng accountability to low-income residents as well as the board
composition requirement. Many of these nonprofits are currently investigating ways and means
of reorgamzmg to meet CHDO requirements. The City is ready to provide assistance and
tecnmcal recommendations to assist nonprofits in becoming CHDOs.
HOME PROGRAM FUNDS
Summary of Matching Contributions - In accordance with the match requirements, the City of
San Jose will provide a 25% match.
.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
32
>
BMR Information for Santa Clara County cities
City
Los Gates
Got BMR?
Yes
Required
Affordability
Period (in
years)
No. of Units
Number
Number
in Current
Estimated
Estimated
Ongoing
33
Housing
Supply
1
4
Yes
30 years
approx.75
10
10
Cupertino
Yes
99 years
140
20-30
?
Palo Alto
Yes
59 years
151 owner &
101 rental
(Includes 63
new In 2001)
63 rental units;
About 8 resale
owner units
new rentals
30 years
38
8
8
Sunnyvale
Yes
20 years
761
4
2
Campbell
Yes
25 years
13
4
6
30 years
58
9
40
Yes
James Walgren
(650)948-1491
Developers must provide BMR units In any multlfamlly projects,
projected 10-20% future requirement.
Vera Gil
Developers pay a fee for a fraction of a unit. Otherwise, units must be provided on-slte.
(408)777-3251
(650)329-2108
Jeff Pedersen
(408)615-2491
Barbara RIgney
(408)730-7254
Sharon Teeter
(408) 866-2137
South County Housing
BMR Program Is a Housing Element Policy, not an ordinance;
In-lleu fees allowed In some situations.
'Applies only If Redev Agency subsidy provided to defray loss of market rate.
Developers allowed to pay "In lieu" fee if fewer than 20 units In development.
BMR requirement for redevelopment project areas only.
Some Housing also provided by Housing Trust, borrower's own labor Is Included.
842-9181
Trust Fund)
Yes
Deed of Trust affordability requirement Is ongoing.
No New Owner
Yes
Milpitas
Housing Authority
Cathy.Slegel
Units; Estimate
Housing Coordinator
of 8 resales; No
Santa Clara
(also Housing
Comments
Nanie
and Phone
Rita Benn 364-0994
Los Altos
Gilrpy
BMR Program Contact
to come online to come online
in 2001
in 2002
55 years
668
28
162
Felix Relliord
BMR Units required In Redevelopment Areas.
586-3071
H/lountaln View
San Jos§
Yes
No
55 years
0
-
-
Developers allowed to pay 10% "In lieu" fee for not meeting 10% requirement. No money has
been collected to date.
*
-
-
-
*
2 THE HOUSING CRISIS IN CALIFORNIA
2.1 COMPARISONS
2.1.1 Comparison of California with the US
^
i
Figure 2 shows that over the past 12 years the median home price has always been
higher and also more volatile in the Western region ofthe US. Figure 3 compares the median
home price in California with that ofthe US over the period 1968-1999.It is interesting to
note that until 1974,home prices in California exceeded that ofthe US by a small margin
only. California home prices started diverging rapidly from that ofthe US in 1974 — the
period marking the escalation of defense contracts awarded to CA. Figure 4 shows that the
path ofhome prices in California followed the path of prime defense contracts awarded to
California.^
Even though California's median household income and rate ofjob creation has
always been larger than that ofthe US,housing affordability has always been sigmficantly
lower in California. Figure 5 compares the affordability indexes of CA and US over the past
12 years. The path ofaffordability is the inverse ofthe path ofhome prices. The fall in
affordability in California from 1988 to 1989 and again from 1998 onwards is miich steeper
in California. Nevertheless affordability has always been lower in California.
The National Association ofRealtors(NAR)measures the ability ofthe median
income family (or first time hoihebuyer)to qualify for a mortgage on the median priced
home(or a starter home). The index used by the California Association ofRealtors(CAR),
measures the share ofhomes within a specific market that a typical household can afford.
For example,according to the CAR affordability index, only 31% of Califorman households
13
can afford a mftdian priced single-family California home. For the US as a whole,53% of •
US households can afford a median priced single-family US home.
)
Figures 2-5
Median Home Prices; US vs. the Four Broad Regions, 1998-2000
Median Home Prices: US vs. CA,1998-2000
CA Home Price and Prime Contract Awards to CA,1960-1998
Affordability Indexes: US vs. CA,1988-2000
180i
250000-
West
Califbmia
160-
200000forth East
140
US
150000-
South
120-
UidVlfest
100000100
50000-
60
I
I
I
I
I
I
I
I
I
I
I
I 1 I I I 1 I I II 1 1 I I 1 I I I I I I 1 I I
I
70
88 89 90 91 92 93 94 95 96 97 98 99 00
75
80
85
< I I"1
95
90
Rgure 3 Median Home Price: CA vs US
Figure 2 Median Home Prices: US and 4 Broad Regions
70DOD contlBds
60<
50'
40'
eden Home Price
Calitbmia
30-
20
I
I
1
I
I
I
I
I
I
I
i
88 89 90 91 92 93 94 95 96 97 98 99 00
SO 62 M 66 6> 70 72 74 78 7a 80 82 84 as SS 90 92 94 ee !
Figure 4 CA Home Price and Prime Contract Awards to CA
Rgure 5 Affordaliaity Indexes; US and CA
Sources ofData:
Median Home Price ofUS and Four Regions: National Association of Realtors(NAR)
Median Home Price in CA and Affordability Indexes: California Association of Realtors
(CAR). Prime DOD Contracts: Department ofDefense.
14
Figure 6
Affordability Indexes: US vs. CA,1999-2000
55-
US
US
5a
46-
4a
CA
35.
CA
aa
2000
1999
Figure 6 shows that betweenl999-2000, affordability in California fell by a larger amount
than it did for the US as a whole.
The National Association of Homebuilders found that eight ofthe nation's ten least
affordable housing markets in the fourth quarter of 1999,and 14 ofthe top 25, were in
California. Overall, these 14 markets, indicated in Table 1 below,accounted for more than
two-thirds(72 percent) ofthe State's total population. The least affordable markets include
virtually all of California's coastal metropolitan areas from Santa Rosa to San Diego.
Surprisingly, the areas of Chico-Paradise and Stockton-Lodi were also included among the
25 least affordable metropolitan areas.
Table 2 ranks the states based on the two-bedroom housing wage. This is the hourly
wage needed in a 40 hour week,to be able to rent a 2-bedroom apartment, with housing
expense not exceeding 30% ofthe household income. The higher the rank, the less
affordable is the state. On this criterion, California is 1^ most expensive state in the US.
15
However a look at Tables 3 and 4 below indicate that the majority ofleast affordable MSAs
i
and counties nationwide are in California. This points to the high variation in affordability
within the State of California.
Table 1
The Nation's Most Expensive Housing Maikets
2
San Francisco, CA
Santa Cruz - Watsonville, CA
3
Eugene-Springfield, OR
4
Santa Rosa,CA
San Jose, CA
1
5
6
7
8
9
San Luis Obispo, CA
Salinas, CA
Portland - Vancouver, OR, WA
Lowell, MA
10
San Diego, CA
11
Laredo, TX
Oakland, CA
Santa Barbara, CA
Portsmouth - Rochester, NH,ME
Salem, OR
12
13
14
15
18
Los Angeles, CA
Flagstaff, AZ
Greeley, CO
19
New Bedford, MA
20
Vallejo-Fairfield-Napa, CA
16
17
21
Ventura,CA
22
Orange County, CA
23
Provo-Orem, UT
Chico-Paradise, CA
Stockton, Lodi CA
24
25
Source: National Association ofHome Builders(1999)
16
Table 2
State Ranks Based on Two Bedroom Housing Wage
Rank
State
2BDR Housing Wage
51
New Jersey
$16.88
$16.60
$16.52
$16.43
$16.04
$15.67
$15.22
50
•
District ofColumbia
49
48
Hawaii
Massachusetts
47
46
New York
Connecticut
45
44
California
Ala^
43
42
New Hampshire.
41
Nevada
M^land
40
hlinois
39
38
Delaware
37
36
Colorado
Rhode Island
35
Florida
Washington
34
Virginia
33
Arizona
32
Vermont
31
Utah
30
Oregon
29
Minnesota
28
Michigan
27
Pennsylvania
26
Texas
25
Georgia
24
23
Maine
Wisconsin
22
21
Ohio
Lidiana
20
16
North Carolina
New Mexico
Tennessee
Nebraska
South Carolina
15
South Dakota
14
Montana
19
18
17
13
Wyoming
12
Kansas
11
I(Mo
Iowa
Missouri
Louisiana
North Dakota
10
9
8
7
6
5
4
3
2
1
$15.18
^
Kentuclgr
Oklahoma
Alabama
Arkansas
Mississippi
West Virgirua
$14.15
$13.42 .
$13.39
$12.79
$12.65
$12.62
$12.34
$12.28
$12.20
$12.04 ,
$11.95
$11.91
$11.69
$11.67
$11.56
$11.34
$11.26
$11.16
$11.13
$10.83
$10.60
$10.30
$1023
$10.16
$10.04
$9.58
$9.56
$9.54
$9.51
$9.45
$9.42
$9.30
$925
$9.10
$9.03
$9.03
$8.98
$8.65
$8.62
$8.61
$8.27
$8.17
$8.12
Source: Out ofReach, National Low Income Housing Coalition, October 2000
17
!
Tables
Least Affordable Counties in the US
County
County Housing Wage for Two Bedroom FMR
Marin County, CA
San Francisco County,CA
San Mateo County, CA
Nantucket County, MA
Santa Clara County, CA
$28.06
$28.06
Darien, CT
Greenwich,CT
New Canaan,CT
. Norwalk, CT
$28.06,
$25.54
$25.15
$22.62
$22.62
$22.62
$22.62
Source; Out ofReach,National Low Income Housing Coalition, October 2000
Table 4
Least Affordable Metropolitan Statistical Areas(MSAs)in the US
MSA
Housing Wage for Two Bedroom FMR
San Francisco, CA
San Jose, CA
Stamford-Norwalk,CT
$28.06
$25.15
$22.62
Nassau-Suffolk, NY
$22.56
$22.00
$20.98
$18.94
$18.85
$18.83
Westchester County,NY
Santa Cruz-Watsonville, CA
Oakland, CA
Orange County,CA
Boston, MA-I^
Source: Out ofReach,National Low Income Housing Coalition, October 2000
18
2.1.2 Comparison Across California
Figure 7 compares affordability over the period 1988-2000 for five key areas of
California. San Francisco, Santa Clara, San Diego, Orange, and Los Angeles are areas
where affordability is significantly lower than the state average. In contrast, Riverside-San
Bernardino has always ranked high in affordability.
Figure 7
Affordability Indexes across California, 1998-2000
6(li
50-
Riv
n Bemadino
40-
.OS Ahgeies
nta Clara
inge County
30-
San Franci
20-
10
1
r-—I
1
r
88 89 90 91 92 93 94 95 96 97 98 99 00
Data Source: California Association ofRealtors
Table 5 below focuses on the affordability index across California over the past year.
19
Table 5
Affordability Indexes Across California
Region
Affordability Index(9/00)
Affordability Index(9/99)
US
53
54
CA
31
36
Monterey
N. Wine Country
San Francisco Bay Area
14
27
17
19
•
18
25
Santa Clara
20
26
San Luis Obispo
San Diego
Orange County
21
24
31
27
32
39
30
Ventura
32
Los Angeles
34
38
Lower Desert
36
44
Central Valley
46
51
Riverside San Bemadino
Sacramento
Hi Desert
47
51
49
67
72
56
Source: California Association of Realtors, October 2000
According to the report Raising the Roof, California's raw land availability and
development capacity vary by area, with severd major metropolitan counties being the most
constrained. With appropriate reserves being maintained,Los Angeles, Orange and Santa
Cara counties will lack sufficient vacant suburban land to accommodate projected household
growth through 2010. For other counties, Alameda,Contra Costa, San Diego and Ventura,
will start running low on land after 2020.
Within California, Table 6 ranks the MSAs in descending order in terms ofthe
number ofhours a minimum wage worker has to work in order to pay the median rent.
Column 13 indicates how many hours a minimum wage worker needs to work per week in
order to be able to afford a 2 bedroom apartment at fair m market rent. Columns 4 and 5
indicate the maximum ^ordable monthly housing cost at 30% and 50% ofthe area median
20
income respectively. Comparing these columns with Column 11,the fair market 2 bedroom
apartment rent, indicates the gap between what these femilies can afford and what they have
to pay. The percentage ofpeople whose rent is more than 30% ofthe household income for a
2-bedrooth apartment is indicated in column 12. Under Federal standard adopted in 1981,
housing is affordable ifit consumes no more than 30% of household income. Ihsirai, Table
6 shows that housing problei^ are most heavily concentrated among families with incomes
at or below 50% ofthe AMI.
21
Table 6
Profile ofLow Income Renters Across California (National Low Income Housing Coalition,2000)
2
5
6
7
8
10
11
12
MSA
MEDFAMMEDINCMO 30M
50M
80M
lOOM
RMEDM RAFF
FMR2
FMR3
%_2 HRS2 2BRCH
San Francisco, CA
San Jose, CA
Santa Cruz-Watsonville, CA
Oakland, CA
$77,486
$91,634
$62,408
$581
$687
$969
$4,245
$4,817
$3,286
$1,273
$1,445
$986
$2,001
$1,792
$1,517
195
20.02%
175
12.94%
55%
146
12.54%
$522
$869
$3,323
$997
$1,459
$1,308
$1,091
$985
56%
$780
49%
132
12.58%
Orange County, CA
Santa Rosa,CA
Santa Barbara-Santa Maria-Lompoc, CA
$73,732
$60,387
$54,938
$54,319
$54,927
$71,857
$52,912
$51,216
$48,000
$56,654
$53,919
$47,601
$1,937
$2,291
$1,560
$1,739
$1,843
$1,510
$1,373
$1,358
46%
$468
$1,550
$1,833
$1,248
$1,391
$1,475
$1,208
$1,099
$1,086
$3,926
$3,147
$2,780
$2,741
$1,178
$980
42%
131
11.12%
$944
$946
50%
127
12.38%
54%
120
3.36%
52%
115
12.14%
49%
112
13.11%
4.34%
3
Bakersfield, CA
Visalia-Tulare-Porterville, CA
Fresno, CA
$46,527
$44,715
$37,514
$37,301
$37,901
$38,700
$35,714
$38,004
$6,457
$7,636
$5,201
$5,796
$6,144
$5,032
$4,578
$4,527
$4,577
$5,988
$4,409
$4,268
$4,000
$4,721
$4,493
$3,967
$3,877
$3,726
$3',126
$3,108
$3,158
$3,225
$2,976
$3,167
Yuba City, CA
$36,923
$3,077
Vallejo-Fairfield-Napa, CA
San Diego,CA
Ventura, CA
Los Angeles-Long Beach, CA
Salinas, CA
San Luis Obispo-Atascadero-Paso Robles, CA
Yolo, CA
Sacramento, CA
Riverside-San Bernardino, CA
Stockton-Lodi, CA
Modesto, CA
Ghico-Paradise, CA
Merced, CA
Redding, CA
$69,555
4
$553
$453
$412
$407
$412
$539
$397
$384
$36a
$425
$404
$357
$349
$335
$281
$280
$284
$290
$1,145
$922
$755
$687
$679
$1,099
$898
$1,437
$661
$1,058
$640
$1,024
$600 - $960
$708
$1,133
$674
$1,078
$952
$595
$582
$931
$559
$894
$469 . $750
$466
$746
$474
$758 ,
$484
$774
$687
$1,373
$1,796
$1,323
$2,830
$3,692
$760
$893
$950
$2,876
$3,101
$2,332
$2,512
$2,571
$2,422
$2,325
$2,265
$1,784
$2,012
$1,849
$1,960
$1,846
$1,887
$738
$923
$1,847
$268
$285
$446
$714
$475
$277
$462
22
$1,280
$1,200
$1,416
$1,348
$1,190
$1,163
$1,118
$938
$933
$948
$968
9
$834
$897
$822
$857
$849
$839
$1,107
$863
$930
$700
$754
$771
$727
$1,350
$1,364
$1,315
$1,250
$1,190
13
14
1
$1,167
$1,103
$1,055
$1,074
$1,045
38%
111
46%
105
4.25%
42%
103
3.47%
54%
101
3.33%
$688
$953
46%
92
3.48%
$645
$621
$894
42%
86
4.95%
$861
43%
83
3.87%
44%
82
3.46%
44%
79
3.38%
$829
$782
$773
$752
$698
$613
$680
$592
$853
$825
$800
$770
54%
78
3.39%
46%
75
3.38%
$535
$584
$604
$555
$557
$538
$747
48%
72
3.54%
$588
$526
$731
44%
70
3.41%
$554
$566
$524
$731
47%
70
3.44%
$517
$720
46%
69
3.24%
$554
$505
$704
46%
68
3.41%
Explanation of Abbreviations in Table 6
MEDFAM
MEDDSrCMO
SOM
50M
80M
lOOM
RMEDM
RAFF
2000 Estimated Annual Median Family Income(HUD)
2000 Estimated Monthly Median Family Income(HUD)
Max. Affordable MontUy Housing Cost at 30% offamily median
Max. Affordable Monthly Housing Cost at 50% offamily median
Max. Affordable Monthly Housing Cost at 8,0% offamily median
Max. Affordable Monthly Housing Cost at family median
2000 Estimated Monthly Renter Median Income(NLIHC)
Max. Affordable Monthly Housing Cost at renter median
FMR2
Fair Market Rent for a unit with two bedrooms
FMR3
F^ Market Rentfor a unit with Ihreebiedrooms
%_2
HRS2
Estimated % ofRenters Unable to Afford FMR for 2 BR Unit
Work Hours per Week Necessary at Minimum Wage to Afford 2 BR Unit
2BRCH
Percent change in 2BR Housing Wage, 1999-2000
Source: National Low Income Housing Coalition
2.1.3 Ramifications ofthe Affordable Housing Crisis
An article, in the Los Angeles Times on January 7,2001, describes how the affordable
housing crisis is affecting residents in terms ofcommute time and displaced families in California,
and businesses in terms ofrising costs^
■
A Santa-Cruz paramedic has a two-hour commute to hisjob.
■
The mayor of San Carlos resigned because he had not been able to find an affordable
place in that small Bay Area city.
■ In Stockton, a family with thousands of dollars to spend lives for weeks in a shelter for
the homeless before finding an apartment.
■ In San Ltiis Obispo,college students take classes in interviewing with landlords. Many
rent by the bed instead ofthe room.
■ In the farm town ofLos Banos,a third ofthe residents rise before dawn for a bumper-tobumper commute to the Silicon Valley—^nearly 100 miles—^because living closer would
cost so much more.
23
■
Where a family could once afford at least a cheap apartment in a transitional area, now
they are doubling up, or bunking 10 to a motel room along places like "the Strip" in
Salinas.
■ A fire captain for Santa Gruz County lives in trailer home with his four kids.
■
An accountant in San Jose moves to Los Banos in order to be able to afford a fivebedroom house.
■ An assistant professor of electrical engineering at San Jose State University simply
cannot afford to buy a house there.
■ An administrative assistant at the University of California at Irvine College of Medicine
commutes a 4-hour round trip firom her home in Riverside Coimty.
■ A couple—^both teachers—^with a combined income of$100,000 per year can only
afford a crammed apartment in Mountain View for $1,300 a month.
■ The efifectS-of the squeeze are spreading the costs to businesses: driving up retails lease
costs, and are pushing companies to relocate to find housing that their employees can
afford
■ In Santa Cruz,three teachers who had accepted job offers in the district reneged as soon
as they started looking for homes
2.2 Estimates of the Number of Low Income Families
In order to respond to the growing population and household growth ofthe State, and
ensure the availability of decent affordable housing for all income groups, the State of
California enacted law requires each Coimcil of Governments(COG)to periodically
distribute the State identified housing need for its region. The Department of Housing and
Community Development(HCD)is responsible for determining this regional need, and
-24
initiating the process by which each COG must then distribute their share ofstatewide need
to alljurisdictions within its region. Table 7 presents the projected needs of housing by
mcome category, and has been constructed from data provided by the COGs across the
State.
Table?
Construction Need of Housing Units by Income Category in the Areas with a Middle
Income Affordability Problem
Jurisdiction
Marin County
San Francisco
Total
Very
Projected
Need (7.5
orSyrs)
Low
Income
6,515
20,372
1,241
5,244
16,305
3,214
Low
Moderate
Incomes
Need
618
57,991
11,424
7,733
26,114
VallejoFairfield-Napa
10,423
Santa Rosa
Orange County
Los Angeles
869
520
455.5
47
15,990
1,567
4,305
7,219
2,174
449
1563
5,173
15,659
25,735
7,732
1,291
1275.9
969
1,959
7,086
2,567
11,327
1,031
3,482
2,238
5,337
2,364
7,654
75,502
181,885
1,539
15,047
42,356
9,725
29,174
2,120
16,074
36,179
3,025
34,657
74,212
1,021
10,067
24,251
4,060
3,496.2
2,298
120,663
27,518
18,376
24,411
50,359
16,088
7,208
212
14,842
18,765
38,244
12,475
20,062
83.2
2,721
16,231
4,536
21,960
8,790
37,237
2,752
19,058
1846
4205
403
County
San Bemadino
Mfle
2,716
970
County
Riverside
(Sq.
Miles)
2,930
7,363
County
Oakland
San Jose
Persons
Per Sq.
1,726
5,639
County
Santa Clara
Land
Area
2,126
City/County
SanMat^
Average
Yearly
Above
Moderate
93,568
21,685
County
Ventura County 20,641
San Diego
95,479
4,595
20.051
790
670.9
r
Notes:
for rows 1-7 is January 1999-June 30,2006, and the data is from
^sociation ofBay Area Governments ABAG website. The time period for rows 8-13 is
from January 1^8-June 30,2005,and the data is from Southern CaHfomia Association of
A
*
Ji*
J? T
is a 5-year period from July
Jo
T Area is for^1990,and the data is from
Association
of(^uickfacts
Governments
(SANDAG).
Land
California
from the U S
cer^B^au website. Persons per square mile is for 1999, and the data is from California
Qmckfacts from the U.S. census Bureau website. For the sake ofcomparison it may be
noted that the persons per square mile is 212.5 for California and is 77.1 for the US.
25
It can be seen from Table 7 that the counties with the greatest projected growth in ■
terms of average annual need are: San Diego County,Los Angeles County,San Bemadino
Coimty, and Riverside Coimty.
Table 8 estimates the percentage oflow-income, moderate income,and above
moderate-income households in key regions in California, based on the 1990 census data.
The proportions in Table 8jhave been constructed from data on the number of households
provided by The Comprehensive Housing Affordability Strategy(CHAS),in a study
commissioned by HUD in order to provide local housing personnel with useful housing
data. The limitation ofthis study and aU other studies that focus on the entire State is that
the data is based on the 1990 census. Table 9 ofthis report uses the proportion listed in
Table 8, and obtains the number oflow-income households for 1999. Research conducted
by the Public Policy Institute of California(Reed, 1999)^points to widening ofthe income
gap between the rich and the poor. It therefore appears very likely that the estimates in
Table 9 underestimate the number oflow-income households. In the absence ofthe
availability of Census 2000 numbers,these are the best estimates that can be constructed on
a uniform basis across the key regions in California.
26
Tables
Estimates of the Proportion ofHouseholds that are Low Income
(Calculated from 1990 census data)
Comity
Los Angeles
Marin
Orange
SanDiego
Income Range
Santa Clara
Santa Cruz
Renters with any
Owners with any
Problems
Problems
y Low Income(0-50% of AMI)
27.83%
17.95%
4.1%
Low Ihc(51%^0% ofAMI)
15.28%
7%
2.89%
Mod Income(i81-95% ofAMI)"
8.P/0
2.3%
1.74%
Above Mod Ihc(>95% ofAMI)
48.79%
3.81%
8.95%
AllHooseholds
100%
31.06%
17.66%
Very Low Licome
17.27%
8.5%
3.9%
Low Income
7.9%
3.3%
1.6%
Moderate Income
6.8%%
2.33%
1.49%
Above Moderate hicpme
75.03%
3.85%
13.89
All Households
100%
17.98%
20.88%
Very Low Income
19%
10.53%
422%
Low Income
9.6%
4.52%
2.1%
Moderate Income
8%
2.6%
1.92%
Above Moderate Income
63.4%
3.85%
13.09%
All Households
100%
21.48%
21.33%
Veiy Low Income
20,6%
12.69%
3.57%
Low Income
17.53%
7.5%
3.1%
Moderate Income
8.48%
1.7%
1.8%
Above Moderate Licome
53.42%
2.60%
10.10%
All Households
San Francisco
Households
. 100%
18.57%
24.49%
2.6%
Very Low Licome
30.87%
19.83%
-
Low Licome
10.24%
4.9%
1%
Moderate Licome
8.57%
2.9%
0.78%
Above Moderate Licome
50.32%
4.56%
5.52%
All Households
100%
32.19%
9.9%
Veiy Low Licome
18.81%
10.45%
3.68%
Low Licome
7.5%
4.8%
1.%
Moderate Licome
7.22%
226%
1.62%
Above Moderate Licome
66.48%
2.88%
1420%
All Households
100%
20.39%
21%
Veiy Low Licome
24.66%
1220%
Low Licome
14.17%
5.3%
2.76%
Moderate Licome
8.28%
2.1%
2.3%
Above Moderate Licome
52.89%
2.73%
12.19%
AllHooseholds
100%
22.33%
22.75%
^
5.5%
Source: Constructed from data provided by CHAS. Notes: percentages are with respect to total
number of households. *Most other sources t5^ically extend the range for moderate income
to 120% ofthe AMI.
27
•t
It can be seen from Table 8 that the percentage of households that are 0-80% ofthe
HUD specified Area Median Income varies among comties(based in the 1990 census). As
a percentage oftotal households in that county it is 43.11% in Los Angeles,41.11% in San
Francisco,38.83% in Santa Cruz,38.13% in San Diego,28.6% in Orange County,26.31%
in Santa Clara County,and 25.17% in Marin County. It can also be seen that in most cases,
the single category "wifii the largest proportion of households with any housing problems is
the category: very low-income renters. However,in Marin County and Santa Clara County
the single category wifri the largest proportion of households that have any housing
problems is the category: owners with incomes above 95% ofthe AMI. In the coimty of
Santa Cruz these two categories are equal in size, and in Orange County,the proportion of
very low-income renters is only slightly larger than the proportion of above moderate
homeowners with any problems.
Table 9 presents the estimated number of very low-income and low-income
households and the number ofrenters and owners in these categories with any housing
problems in 1999. These estimates have been calculated by multiplying the proportions
provided in Table 8 with the estimated number of households in 1999. The estimated
number of households is obtained by taking the estimated population for 1999 from
California Department ofFinance website and dividing the population by 2.94, which is the
e number of people per household for CA for 1999.
28
Table 9
Number of Low Income Households in 1999(Estimated)
County
Los Angela
Marin
Orange
San.Piego
San Francisco
Santa Clara
Santa Craz
Income Range
Households
Renters with
Owners with
Any Problems
any Problems
Very Low Income
926,720
597,722
133,197
Low Income
508,813
233,095
96,235
Very Low Income
14,491
7,132
3,272
Low Income
6,628
2,769
1,342
Very Low Income
181,837
100,776
40,387
Low Income
91,875
43,258
20,097
Very Low Income
202,041
124,461
35,013
Low Income
171,931
73,558
30,404
Very Low Income
83,706
53,770
7,050
Low Income
27,766
13,286
2711
Very Low Income
109,891
61,050
21,499
Low Income
43,816
28,042
8,764
Very Low Income.
21,254
10,515
4,740
Low Income
12,213
4,568
2,378
i
Source: US Census Bureau, California Department ofFinance, and Comprehensive
Housing Affordability Strategy
From Table 9 it can be seen that Los Angeles tops the list in terms ofthe number of
total very low-income and low-income households; very low-income and low-income
29
renters with any problems; and very low-income and low-income owners with any
problems. This is followed by San Diego County and Orange Coimty.
3 LOW INCOME HOUSING ASSISTANCE
The first part ofthis chapter(Section 3.1) provides an overview ofthe major forms of
low-income assistance that are being used by local housing authorities in California. The
second part ofthis chapter(Section 3.2)examines whether these forms ofassistance will be
impacted by planned middle-income housing assistance.
3.1
Types of Housing Assistance
In general the types oflow-income assistance available to a local housing authority in
California can be classified into:(A)Federal Housing Funds that are usually formula-based
and apportioned directly to the jurisdiction,(B)Redevelopment Housing Set-Aside Funds at
the county or city Level, and(C)funds that are accessible to a housing authority through
application and competition, or forming partnerships with agencies that control the funds.
3.1.1 Federal Funds that are Formula Based
1. Section 8 Rental Assistance Program
Federal housing programs started in the 1930s as production programs. Construction
of public housing created jobs during the Depression and increased the stock of affordable
housing. Nationwide there has been very little construction of public housing since the
1970s. The production oflow-cost units was supported for a period oftime primarily rmder
the Section 8 program created in 1974,after the government stopped funding the production
of public housing. Under this program, private entities receive subsidies fi'om the Federal
. ■
j
government to bmld and own projects. The Federal government also subsidizes the rent of
30
tenants in these projects for a period oftime, generally 20-40 years. New construction of
these projects halted in the early 1980s.
'
Since the early 1980s, most new housing commitments have been in the form of
tenant-based subsidies, under the Section 8 and voucher and certificate programs. Congress
had frozen the program at zero new vouchers for five consecutive fiscal years between
1994-1998. The bill in Fiscal 2001 is expected to fimd 79,000 additional Section 8 vouchers
rr*i •
rd
nation wide,up firom 60,000 last year, and renew all expiring vouchers. This marks the 3
straight increase in Section 8.
HUD has two main engines for making rental housing affordable: the Section 8
program, which subsidizes rents, enabling low-income families to rent privately owned
housing; and public housing units owned and operated by local authorities of public
^
housing. Program efforts in these and related areas include new incremental housing
vouchers, revitalizing distorted public housing(HOPE program). The HOPE VI awards
grants to local housing authorities to address creatively the physical, social, and fiscal
problems of poor-quality public housing.
HUD Section 8 funds are transferred to the account ofthe local housing authority
monthly- The housing authority then disperses rent payments to the landlords who
participate in the program. The housing authority receives as a part ofthe transfer a certain
flmt(for example,$59 in Orange County)in operating reserves for administrative fees.If
efficiently operated this more than pays for the admin expense and the surplus can be
accumulated.
31
2. Community Development Block Grants(CDBG/
Each hoiising authority or entitlement city receives an annual allocation from HUD,
which it then distributes through an annual application cycle. The cap on administrative
expenses in CDBG is 20% ofthe annual grant. In general, CDBG is the most flexible
program as long as activities meet one ofthe 3 national objectives:
■
Offers benefit to low- and moderate-income people.
■
Aid in the prevention or elhnination ofslums and blight.
■ Meet other community development needs that present a serious and immediate threat to
the health or welfare ofthe community.
^
I
3. HOME Investment Partnership program
The Federal government established the HOME program in 1990 to improve and/or
expand a jurisdiction's affordable housing stock, and ajurisdiction must invest aU HOME
Investment Program funds in affordable housing. The administrative fee allowed for
programs using HOME grants 10% of each grant. HOME funds must be matched 25% by
non-federal sources. HOME program require deeper affordability than CDBG,i.e. it
reaches lower income families,^ HOME fimds can be used for the following activities that
promote affordable rental housing and lower-income home ownership: acquisition, new
" construction and reconstruction, moderate or substantial rehabilitation, homebuyer and
tenant based assistance, and planning and support services.
32
4. Homeless AssistanceJiinds, including SuperNOFA and Emergency Shelter Grant
HUD fimds many homeless needs through anmial notifications offimding
availability(SuperNOFA), The Federal government also grants jurisdictions Emergency
t
Shelter Grants. ESG fimds are granted to jurisdictions in proportion to the previous year's
CDBG allocation.
3.1 .2 Redevelopment Tax Increment Housing Set-Aside Funds and Countv/Citv Owned
Property
Many counties and cities as well have established redevelopment areas. Under State
law,20% of gross redevelopment revenues must be set aside into a low-income housing
fimd and be spent on eligible housing activities. Cities and coimties typically focus their
programs on households earning less than 80% of adjusted AMI,although redevelopment
dollars can serve households with incomes up to 120% of AMI.
Counties and cities typically own several properties such as shelters, community
centers, homing developments, and rental projects. The most recent Housing Element for
Orange County notes that virtually all parcels imder coimty control "present serious
development obstacles" such as proximity to unsuitable uses(inactive solid waste disposal
sites) or difficult site conditions.®
3.1.3 Other Sources ofFunding ^
These are accessible to counties through application and competition or through
forming partnerships. They can be subdivided into the following forms:
Federal Tools
Tax Credits: Since the mid 1980s, subsidies for the production ofnew rental housing
have generally been provided under the Low Income Housing Tax Credit,in addition to the
33
and the HOME program. The Low Income Housing Tax Credit, LIHTC,created in 1986, is ■
a dollar for dollar tax credit from the Federal government,taken over ten years by investors
in qualified housing developments. To qualify,the housing must,at a minimum,have 20%
ofthe nnits affordable to those at 50% ofthe area median income(AMI),or 40% affordable
to households at 60% of AMI. The Federal government allocates a certain amount oftax
credits every year to each system on a per capita basis. The State of California then runs a
competition to award these credits to sponsors ofhousing for low-income households. The
Federal government allows two forms ofsubsidy:"nine percent^ and "four percent. The
terms 9% and 4% refer to the rough percent ofthe total qualified development costs that
may be taken each year for the 10-year period. This is a large contribution ofequity money,
which unlike a loan doesn't to need to be repaid. Therefore rents need not pay as large as a
first mortgage, as would otherwise be needed. Therefore,the rents can be lower,so lower
income people can consequently afford the rents.
Large shares ofthe units supported through the LIHTC or the HOME program are
not affordable to poor families. Moreover most ofthe poor renters v4io live in these umts
can do so only because they receive a rental subsidy to help them pay the rent.
Tax-Exempt Bonds: Cities, counties, housing authorities, and redevelopment
agencies can issue tax exempt bonds to finance the construction or acquisition and
rehabilitation ofrental housing, or to assist first time homebuyers with mortgages for the
purchase ofnew or existing housing. Borrowers tiien pay offthe bonds with revenue form
rents. The issuers are not responsible for the bond payments. As in the case ofthe LITC,a
certain ammmt ofbond allocation authority for tax-exempt "private activity bonds" is
34
granted on a per capita basis to each state. The State of California then allocates bond
issuance authority to users through a set process.
Multifamily requirements: The entire property must be maintained as reiital housing
for as long as bonds are outstanding, but in no case for less then 15 years. Federal law has
established 2 alternative income standards. Either 20% ofthe units ihust be affordable to
households at or below50% ofthe AMI or 40% ofthe units must be affordable to
households below 60% ofthe AMI. An issuer may also request and receive a private
activity bond allocation from the California Debt Limit Allocation Committee(CDLAC)
i
prior to issuance. Such allocations are very competitive.
Single-Family Requirements: The income ofthe borrower may not exceed 90-115%
ofthe median income depending upon household size and whether homes are new or
existing houses. The maximum eligible sales price is established by the IRS based upon
90% ofthe average area purchase price.
Section 202 Supportive Housingfor the Elderly: Capital advances are made to
eligible private, nonprofit sponsors to finance the development ofthis type of assisted living
rental housing. The advance is interest free and does not have to be repaid, so long as the
housing remains available for very low-income seniors for at least 40 years. Project rental
assistance covers the difference between the HUD-approved operating cost per unit and the
amount the resident pays.
Section 811 Supportive HousingPro^amfor the Disabled: Provide capital grant
funding for projects and rental assistance to disabled households.
FHA Title 1 Home ImprovementLoans: These loans require no equity froin the
borrower. Tbey are government-backed by the Federal Housing Administration. They
35
reduce risks for lenders, and consequently,lenders reduce underwriting standards. Current '
market interest rates are 12-14%. Using bond jSnancing,the rate can be subsidized to below
7%. FHA title 1 loans offer counties a home improvement loan tool that readily attract
private partners and stretch county resources.
HUD also provides funding for the Self-Help, Homeownership Opportunity
Program, which uses "sweat equity" to produce affordable homes for new homebuyers
State Tools
State Tax Credits: The State of California has also established a low-income housing
tax credit program, which parallels many ofthe provisions ofFederal tax credit rules. The
California Tax credit Alloc^on Committee(TCAC)allocates this program in conjunction
with an allocation ofFederal tax credits. The tax credit awarded equals 30% ofbasis, taken
over 4 years. As for Federal tax credits, completion of State tax credits is very high.
California Housing Finance Agency programs: CFA administers much ofrental and
ownership housing programs funded with the proceeds oftax-exempt bonds.
Combination of City, State and Federal Tools for Home Ownership
The majority ofthe homebuyer programs fall in to one of3 types: Silent Second Loans,
Credit Certificates, and Mortgage Revenue Bonds.
L
Silent Second Loan:(known also by other names such as
Loan,Shared Equity
Loan, etc.) is a loan that provides the difference between what a home costs and what the
buyer can afford to pay for it(the first mortgage plus down payment). Because this loan
requires no monthly payments in initial years(is silent), and is secured in second position
(second)by a recorded Trust deed,it is called a "silent second" loan. The payback comes
later, when the household wiU probably be more able to afford it
36
Mortgage credit Certificates: MCC is not a loan; it provides individual homeowners'
with a tax credit ofup to 20% ofthe interest on a mortgage. This program is very
constrained due to competition for CDLAC allocation. Mortgage lenders take the extra
income resulting from the MCC into accoimt when underwriting the loan,thus increasing
the possible loan amount*
Mortgage Revenue Bond Loan(MRB): This is a first mortgage with a fixed-rate, 30year term and a lower than market interest rate, therefore lower monthly payments.
The Southern California Guide to Homebuyer Programs illustrates that a family,
which wants to buy a $150,000 home with $5,000 of savings, would be making monthly
payments of$1,014 without any assistance. They would be paying $909 with a Silent
Second,$879 with a 15% MCC,and $916 with an MRB loan. According to Affordable
Housing Applications,Inc. In the year 1998,over $400 million was allocated to help state
and local agencies fund their MCC and MRB programs, statewide. In spite of being heavily
funded, many homebuyers have not heard ofthese programs, according to AHA,because
small government offices, which have no money for advertising, offer them.
Private Tools
The Federal National Mortgage Association Down Payment Assistance Program,,
called "Fannie Mae," offers a program to provide second mortgages to homeowners. This
second mortgage can serve as the down payment and closing costs on home purchases. The
program requires a city or county to post a reserve fund equal to 20% ofan amount than
Fannie Mae then makes available for such second mortgages. Resources are leveraged at a
minimum of5:1. Flexible income restrictions permit use by households above 80% ofthe
AMI
37
Each county has private lenders who are eager to lend on new development, home '
improvement,home purchase and building rehabilitation. Many ofthese institutions are
also motivated to get CRA(Community Reinvestment Act)credit by lending in lower
income areas or for community development projects. Counties may find opportunities for
leverage among these individual programs perhaps in conjunction with other programs such
as Fannie Mae's downpament assistance programs.
Through Ginnie Mae,and by setting housing goals for Freddie Mac and Fannie Mae,
the FHA Department provides a broad range of mortgage products and increases the
liquidity ofthe mortgage market These activities increase the attainability of mortgage
credit, especially for first-time, low-income, minority, and central-city hoinebuyers. The
FHA also guides potential homeowners through the complex process of home buying and
will more eflBciently provide information and assistance to FHA's clients, lenders, and
borrowers.
In FY 2001,FHA is proposing to develop a new hybrid adjustable-rate mortgage.
(This is expected to enable FHA to help 55,000 additional families become homeowners in
FY 2001.)HUD is also proposing to.continue the Administration's Partnership for
Advancing Technology in Housing(PATH),a public-private initiative that helps creates
communities by spurring improvements in techniques for housing design and construction.
3.2 Proliferation of Middle Income Assistance and Impact on Low Income Housing
Assistance
Home prices are rising faster thm incomes, creating the "Food Chain Effect" or the
"Non-Trickle Down Effect." Because home prices are rising faster than incomes, especially
for incomes at the lower to middle portions ofthe scale, many so called middle-income
buyers are now forced to buy homes that were previously bought by low-income
38
households. As moderate-income buyers dip into the housing market oflow-income buyers',
the stock of affordable homes available to the low-income buyers rapidly depletes, causing
their prices to rise even further. More specifically, in the case ofthe Mortgage Credit
Certificate Program,discussed above, middle-income households that qualify will attempt to
buy homes that are priced at or slightly below the allowable threshold ($204,937 in Orange
County). This will increase the jHice ofsay a $190,000 home to the threshold value of
$204,937.
'
The proliferation of middle-income housing assistance has been typically occurring
in the following three ways:
(1)Explicit relaxation ofFederalfunding rules. In recent years, some ofthe Federal
funding assistance that is available has begun to shift fi'om poor families toward families at
somewhat higher income levels. From 1988-1996, Federal law targeted a majority ofthe
housing assistance becoming available through turnover or new subsidy commitments under
the Section 8 and public housing programs to families who met'Tederal preference rules."
Typically, that meant households who paid more than 50% oftheir income for rent or had
lived in severely deficient housing. These were the worst-case needs. In 1996,these
preference rules were suspended. As a result, administrators of housing programs had the
discretion ofusing housing assistance through Section 8 to households at somewhat higher
income levels. This is true not only for project based assistance, but for tenant based
vouchers and certificates as well.
The apparent rationale for bringing more moderate-income families into public
housing projects was to improve the income and employment mix in such projects. There is
no similar rationale for shifting tenant-based vouchers and certificates that help,families rent
39
units on the private market from poor femilies offamilies at higher income levels. It is
cheaper for the Federal govt to provide vouchers for people with slightly higher incomes.
The consolidated plans of most counties indicate that preference for Section 8
vouchers will be given to low and extremely low-income groiq)s. The 1998 Quality Housing
and Work Responsibility Act maintained that households with no more than 50% ofthe
median income are eligible for the program. In addition,the regulations state that 75% of
new admissions to the program must have incomes at or below 30% ofthe area median
income.
Housing authorities are therefore challenged to monitor their issuance ofhousing
vouchers to ensure that at least 75% are given to households with less than 30% of median
incomes. Thus,it can be seen that HUD is targeting the assistance to the lowest income
group rather than those with higher incomes.'
(2)Relaxation ofthe Income Cap Exemption on CDBG. In early 2000,HUD granted
an income cap exemption to the 10 highest cost housing markets in the nation. Prior to this
act of Congress,the income cap in high cost areas ofthe country,such as Santa Clara
County and Orange County, was set at 65% ofthe AMI and not 80% ofthe AMI. This had
a negative impact on individuals with incomes between 65% ofthe median and 80% ofthe
median. The Santa Clara Urban County resident in need ofrepairs for code violation would
be ineligible for housing rehabilitation loans ifthe household income for a family of4
exceeded $56,950.
The relaxation ofthe income cap in high cost counties in CA is justifiable when we
consider the wide discrepancy between the median home price in Santa Clara County,
$530,000 in October,2000 vs. that of$133,000 for the US. In the first fiscal years of
40
operation under the relaxed income limits, Santa Clara Urban County Officials used 90% of
die ^ditional funds generated to serve the low and very low-income groups.
(3)Initiatives Such as "Teacher Next Door" and "Officer Next Door". The Teacher
Next Door Initiative took effect in 1999 and is modeled on UUD's Officer Next Door
Initiative that took effect in 1997. "When we help teachers save money on homes in poor
neighborhoods, we help revitalize those neighborhoods," Cuomo said. "The Teacher Next
Door Initiative will attract teachers to live and work in urban school districts where they are
needed most, and will give them new opportunities to mentor their students outside the
classroom."
Homes offered for sale at half price under both the Teacher Next Door and the
Officer Next Door Initiatives were previously insured through FHA and then foreclosed
when owners failed to make mortage payments. The homes ^e located in designated
revitalization areas. Revkalization areas are typically in low- and moderate-income
neighborhoods, have many vacant properties, and often have high crime rates. They are
considered good candidates for economic development and improvement
Neither the Teacher Next Door nor the Officer Next Door Initiatives cost taxpayers
any.money. Cost-saving management improvements allow FHA to reduce the price of
homes and reduce its mortgage insurance premiums to teachers and officers. No tax dollars
are used to fund FHA programs.
Any public schools teacher who is employed full-time is eligible to purchase a home
under the Teacher Next Door Initiative ifit is located in a revitalization area within the
school district in which the teacher works. Teachers are required to live in a home purchased
under the initiative for at least three years.
41
.
Federal tax credits to builders oflow-mcome housing are not adequately indexed to ■
inflation. These tax credits also become insufficient as interest rtes rise. Consequently the
LITC and the HOME do not produce much housing that is affordable for poor households
that are not already being subsidized through another housing assistance program.
Indexation ofthese grants to inflation should alleviate some ofthe concerns oflow-income
households.
\
The Low-Income and Middle Income Households as Two Independent Markets
An analysis ofthe types oflow-income assistance programs in Section 3.1, given
above,combined with face-to-face or telephone conversations with housing personnel in
two major counties in California,indicate that the funds used for addressing middle^income
ownership are different from the funds used to address low-income affordability. Section 8
vouchers and other Federal sources offunding predominantly finance the extremely low- to
low-income housing market. Many housing personnel believe that it is simply not feasible
to provide the large amounts ofsubsidies required to convert the low-income households
into homeowners. Homeownership assistance is mostly provided to households who are at
higher income levels, up to 100% to 120% ofthe area's median income. A significant part
ofhomeownership assistance comes from forming partnerships with private agencies such
as Fannie Mae.
Conclusion to Chapter 3
The situation ofthe low-income households is getting worse as manifested in the
long waiting list for Section 8 vouchers, and the widening gap in the availability of
affordable rental housing. The number oflow-income households who rent rooms in motels
because they cannot afford the security deposit and advance payment ofthe month's rent, is
)
42
rapidly rising in places such as Orange County. In Silicon Valley the number ofhomeless
people is far beyond what can be accommodated in homeless shelters, HUD apparently
relaxed its affordability standards in 1996, by relaxing the Federal Preference Rules. In
1998, however,HUD has reestablished the tighter requirements for qualification for Section
8 vouchers. On the whole HUD has a trend offavoring Section 8 assistance to low and very
low-income households.
Federal funds, such as HOME and LITC,impose requirements that they be used for
low-income households. The funds used to address middle-income afifordability come
primarily firom private sources. In terms ofleveraging coimty resources with these private
sources, it makes economic sense for coimties to provide down payment assistance to
households iq)to 120% ofthe area's median income. More importantly, many ofthe
middle-income hoiiseholds who receive homeownership assistance provide service that is
crucial to the community;they are teachers, police officer, newly hired university
professors,employees ofthe local government^ etc.
Furthermore, discontinuation ofincentives to encourage middle-income home
ownership will not necessarily translate into expanding housing affordability for the lowincome households. For these reasons it appears necessary that policy makers address the
low-income affordability crisis without decreasing assistance provided to near moderate-
income homebuyers. The next chapter presents steps that State policy makers can takft to
msure the solution to middle-income housing affordability does not make the low-income
affordability even worse.
43
(•
SANTA CLARA COUNTY HOUSING TASK FORCE:
REGIONAL HOUSING ACTION PLAN:
STRATEGY PHASE
The Strategy Phase ofthe RHAP Work began with analysis ofthe information
presented in the Research Phase. Based on that analysis, nine areas were identified
in a Preliminary Discussion Document(included) under which strategies could be
grouped. They are, as follows:
Land Use/Planning,
Funding,
Policy,
Land,
Rent Control/Tenants' Rights,
Corporate Involvement,
Community Involvement,
Living Wage/Low Income Supports, and
Planning Process Changes.
After additional work and discussion, a Full Committee Retreat was held on July 18,
2001. At that time the four working groups Needs, Interrelationship with other
Regional issues. Housing Broadly Defined, and Affordable Housing made
presentations about their Work to the full Committee.
In addition, the Committee "collapsed" the above issue headings into four groups,
as follows:
s
• Finance,
• Policy Issues,
• Community Involvement, and,
• Process/land use Planning.
Strategy sessions were then held to e3q)lore, discuss, develop, and prioritize
strategies for each ofthe four areas.
On August 15, 2001, the entire Committee met to develop a set ofrecommendations
now grouped for clarily under the following headings:
• Finance,
• Regional leadership/Expanded County Role,
• Legislation, and,
• Zoning/Planhing/Land Use.
The Strategy Recommendations under each category are included. On August 28,
2001, the committee will meet again to develop Action Steps for implementation of
the strategies listed.
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee
Strategies: Preliminary Discussion Document
Land Use/Planning
1. Inclusionary zoning/Below Market Rate Programs for affordable housing in new development
footprints and/or infill sites.
2. Update general plans and rez»ne in fevor ofhousing, especially high density, even high rise.
3.
4.
5.
6.
Because less land is available, we must build up,(not out into sprawl).
Zoning should allow mixed-use(housii^)development on corporate campuses.
Smart Growth: align housing development with transportation corridors.
Transit agency's land acquisition strategy should include investment in land acquistion for
housing.
7. Preservation ofHUD Financed Affordable Housing units.
8. Coordination ofgeneral plans across the cities in the area.
9. Create incentives for Other cities who are not developing as much affordable housing,
homeless shelters and transitional housing as they should
10. Establish a housing element in a regional basis that has teeth
11. Explore the opportunity for replacing existing low density SFD(substandard) with higher
density mixed income housing
12. Explore the use ofair rights ateve public owned properties (transit lines, etc.)
13. Plan for job growth that is balanced with housing production. Requires regional
inplementation
14. SJ: should permit secondary -"granny"- units horizontal or vertical an possible provide
incentives.
15. SJ: Increase General Plan review ofproposed housing (within greenlme)to twice a year or
more
16. SJ: Inplementation ofan inclusionary zoning policy for affordable housing on all new rental
projects in the city and study the impact ofadoption ofan inclusionary zoning ordinance in
other cities.
17. SJ:In the Specific Plan process for Central Coyote affordable housing needs must be
addressed. This could include inclusionary zoning, increased densities, increased public
funding, private fimding, etc.
18. SJ: Increase all GP ranges throughout City - raise the range
19. SJ: Council and Planning staffsupport the fiill range ofGP densities notjust the lowest
density allowed
20. SJ: Examine higher density on existing imdeveloped land and propose increases where feasible
21. SJ: High rises in downtown as tall as FAA limits will allow - concentrated in downtown
22. SJ: Allow vertical mixed use residential by right in commercial(neighborhood retail and
ofSce) and industrial zoning districts. Sacramento was referenced as an example for
neighborhood retail.
23. SJ: Enable and encourage high density on corporate campuses. Revise design guidelines to
retrofit existing industrial parks to allow housing to be built on parking lots.
24. SJ: Enable and encourage mixed use, high density development(vertical or horizontal) on
industrial lands in North San Jose or other locations as well where it may he desirable
including North Coyote Valley and Monterey Corridor.
25. SJ: Encourage mixed use development in air rights. Examples included over churches, non
profit offices.
26. SJ: Ejq)and existing alternative use policy to allow affordable housing in office zoning districts
27. SJ: Review the City's LOS policy to consider a lower transportation level ofservice for
housing projects in Rincon, Downtown or other areas determined to be appropriate
Funding
1. General obligation bond/short-term .250 sales tax for affordable housing pursued as a
potential source offimding
2. Prioritize limited resources toward the neediest populations first.
3. People most effected need to be helped first: focus on homelessness, low-income housing,
then affordable housing.
4. Allocate a higher percentage ofRedevelopment fimds toward housing (possibly through state
legislation).
5. Lobby to get Federal and State Fxmds for affordable housing
6. Revenue sharing among localjurisdiction for housing, fiscalization ofland use - possibly
pursue state legislation
7. Work with Fannie Mae Freddie Mac and other agencies to create equity fimd to support
housing -leverage more dollars ^ location and energy efficient mortgages, buy downs of
interest rates
8. Require generators oflarge numbers ofjobs(100 or 200 or more) would be required to pay
into a housing assistance fimd.-Housing Intact Fee.
9. SJ: A higher percentage ofredevelopment housing fimds to extremely low-income housing
(affordable to those making 30% or below ofmedian income).
10. SJ: Increase Housing Department's predeyelopment pool fimding
11. SJ: Use reserve fimd to pay for building permit staffto allow for staffadds more quickly
12. SJ: Funding mechanisms needed to ensure that there are adequate staffresources in Planning
AND Building to handle the workload. May or not be cost recovery based and would need
General fimd support
13. SJ: Looking at other sources ofrevenue to put into housing. For example: Taking a
percentage ofsurplus over costs in an existing tax and putting that $$ into the Housing
Department for low-end affordable housing. Have fimds fi-om new industrial development to
State returned to locals for housing development.
14. SJ: Set aside 50% ofRDA's new increment fimds for affordable housing
15. SJ: Consider opportunities for infi'astructure (parks, library, schools, etc.) amenities in
industrial areas that would make it more residential fi-iendly.
16. SJ: Direct Housing Department staffto make changes to speed up process for affordable
housing loans(develop more flexibility in guidelines, create boilerplate loan documents, create
easier process for pre-development pool fimding,reduce time between approval and checkcutting)
PoKcy
1. Enact legislation to address construction defect litigation issue, reduce time limit.
2. Initiate state legislation to revise CEQA rules with state to simplify review for housing
3. Research: Reanalyze assiunption ofhousing not paying its fair share oftaxes - not a drain on
City budgets
4. SJ: Enforce existing City policy that not less than 10% ofall units in multi-femily bond
financed rental housing projects be first offered to tenants with Section 8 vouchers
Land
1. Accelerate availability ofpublicly owned land for housing development(VTA as example).
2. Evaluate and make surplus and/or underutilized public lands available.
3. Investigate a non-profit land trust to acquire land and make it available for affordable housing,
possibly use Housing Trust.
4. Housing should be part ofinfrastructure - Transit projects should buy land for housing
adjacent
5. SJ: Utilize RDA to assemble land
6. SJ: City to take a proactive role in brownfield development to clean up sites and make them
available for housing
7. Reuse underutilized retail properties for housing
8. Rezone underutilized industrial and commercial land for housing
Rent Control/Tenants' Rights
^
1. Ejq)and and update San Jose's rent control ordinance and extend provisions to other cities.
2. SJ: Add just cause eviction ordinance
3. Develop and publish a list ofthe landlords that are engaging in the most questionable of
practices(rent increases, evictions, etc.)to show officials.
Corporate Involvement
1. Housing Impact Fee(see Fxmding #8)
2. Encourage ongoing investment into Housing Trust.
3. Encomage development ofhousing for employees on their campuses
4. Create housing above office units
5. Corporations should join proponents ofbond issues for housing.
Community Involvement
1. Invest in a public education campaign toTengage public, corporate leaders, elected officials.
2. Build a grassroots network and organization with involved people as fest as possible.
3. Our constituencies must be sufficiently educated in public budgeting and land use.
4. Engage our constituents in a new level that makes them part ofproblem-solving and strategy.
5. Community must support elected officials who show leadership (i.e. for higher density)
6. Develop a con^rehensive graph/map that describes the dimensions and the interactions
between issues(housing costs, wages,transportation/long commutes, health, economic
vitality, etc.).
Living Wage/Low income supports
1. Raise the income levels ofwage earners. Pay raises make a big difference in housing
affordability.
2. Look at con^rehensive supports for low-income individuals (i.e. to fimd assisted living)
Planning Process Changes
1. Inclement the smart permit process ofSVMG
'
2. SJ: Combine PD zoning, permit and Tentative map process - have it heard at Director Hearing
and appealable to Council
,
3. SJ: Planning and Building department needs to be streamlined - cut by 25% timelines. Oregon
model for streamline process was mentioned.
4. SJ: Promote concurrent processing ofGP,PD zoning,PD permit and tentative maps possibly with some threshold
5. SJ:Put in place Master EIR's at GP amendment stage for purpose ofexpediting zonings and
permits
6. SJ: Alter building codes and review process (standardize specs) where feasible to
accommodate Manufactured(modular and mobile) homes
7. SJ: Review City's plans for parking, setback, street widths, open space requirements, elevation
issues to make sure they are compatible with density and have attractive design
8. SJ: San Jose specific recommendations introduced by San Jose Mayor's Housing Production
Team -Fall 2000
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Retreat Report
Wednesday, July 18,2001 •3-8PM•505 W.Julian St.•Sari Jose
Presentations of Work Groups
Outcome: Research work groups in phase 1 made presentation to the full committee on their key
findings to delineate the needs and major barriers to housing.
Needs
Despite the lack ofeconomic data from the 2000 Census,the projected need countywide for
Housing units affordable to very low-income(VLI)and extremely low-income(ELI)households
should be around to 82,000. This does not include the need for units affordable to low and
moderate income households. The Work Group is continuing work on these need projections
based on income and projections ofspecial needs documented py the Consolidated plans ofcities
throughout the County. Core foctors identified as contributing to housing need include 1)Lack of
Production[due to high land co^s.Prop. 13 tax disincentives, and reduced state and federal
funding.]; 2)Inability to Preserve Affordable Units [due to gentiification, and HUD financed units
applying to be converted to market rate]; 3)Rapid Job Growth [at both ends ofthe wage
spectrum creating higher process and more intense cori5)etition]; 4)Immigration[both domestic
and foreign, which has fiieled our economic e:spansion and created diverse needs];5)NIMBYism
Qjublic resistance to affordable and higher density housing]; 6)Lack ofRenter Protections; 7)
TraflSc [congestion and increased commute times]; 8)Utility costs; 9)Service Workers being
squeezed out ofMarket; 10)Persistent homelessness; 11)Overctowding; 12)Digital Divide [local
youth are unprepared to meet the employment needs oflocal industry].
Interrelationship with Other Regional Issues
The committee Ideiitified sk major subject areas that require coordination with any housing
planning: 1)Transportation [transit oriented development,transportation systems to
accommodate larger Bay Area and central coast which feed enq)loyees, incorporating model of
transportation nanagement plans into housing planning]; 2)Cost ofCity Services/Fiscalization of
Land Use [tax structure is perceived to limit ability to absorb more housing,requires regional
incentives and state legislation]; 3)Lack ofCoordiriated Strategy[Cities/County do not have
regional vehicle for inediating these concerns]4)Jobs/Housing Imbalance. The conunittee also
discussed the need for a iimovative modeling system that would be able to present information in
a way that residents and policy makers would be able to understand the scope and context ofthe
problem and alternatives. For exanple, a mapping process would project how the region would
look if we increased density as one policy solution, how much housing actually costs, what would
be the impact on transportation systems and municipal services. Other scenarios that could be
used include the impact ofa massive build out oftransit(including neighboring counties), or what
the region would look like if we did nothing at all.
Housing Broadly Defined
The Housing Work Group sought to identify barriers to adequate levels ofhousing unit
production across the entire spectrum ofhousing needs. They presented a few key facts on supply
and affordability including: projection ofsupply meets only 50-66% ofdemand projected; in 2000
rents increased 26%,and the vacaiicy rate dipped to .06%. The Barriers presented included: 1)
Growth Controls; 2)Regulations: Local, State, Federal; 3)NIMBYism;4)Intensity ofUse;5)
Barriers Continued;6)Construction Defect Liability; 7)Density and Zoning; 8)Lack of
Infrastructure; 9)Job and Housing Imbalance; 10)Development Costs.
Affordable Housing
The Affordable Housing Work Group identified and supported the documentation ofseveral key
barriers to the development ofaffordable housing: 1)Financing Constraints; 2)Regulatory
Guidelines-State; 3)State Assistance Guidelines;4)NIMBYism;5)Development Costs;6)
Limited Varieties ofNew Housing;7)Decreased Federal and State Housing Assistance; 8)
Density/Zoning;9)Land Use; 10)Lack ofIncentives to keep housing affordable (preservation);
11) Speculation. The work group also made process recommendations asking for a calendar of
meetings and liaisons with the other committees ofthe County Housing Task Force and
Supervisor Beall's office. Furthermore, the committee also made 2 recommendations calling for
ongoing subcommittee work to continue exploring 1)the total housing need without relying on
ABAG projections and 2)the Determination ofappropriate subsidy levels for affordable housing.
The RHAP Committee conciured as it coincided with a recommendation from the Needs Work
Group.
Presentation by Supervisor Beall
.
'
Supervisor Beall spote with the committee and answered questions about the context that the
County is operating in and the interest in expanding their role in affordable housing. The
Supervisor indicated that it might make sen^ to use a significant portion ofthe County's
settlement with San Jose's Redevelopment Agency for the puipose ofaffordable housing. His
hope is that the efforts ofthe County Housing Task force
help steer a path for the County's
involvement in affordable housing.
Categorize Barriers/Issues
Outcome: After a review ofthe information presented by the Working groups the committee
grouped the barriers identified in the research phase ofthe process into four categories(finance.
Policy Issues, Community involvement, and Process/Land Use Planning)that will facilitate
focused conversations on strategies.
Finance
Constraints
Development Costs
Costs ofCity Services/FiscaUzation ofLand Use
Speculation
State Assistance Guidelines
Policy Issues
Growth Controls
Housing/Jobs Imbalance
Lack ofa Coordinated Strategy
Lack ofinfrastracture
Construction Defect Litigation
Decreased Federal & State Housing Assistance
Transportation
^
Community Involvement
NIMBYism
Lack ofPolitical Will
Process/Land Use Planning
Density/Zoning
^
Limited Varieties ofNew Housing
Regulatory Guidelines-State
Land Use
Intensification ofUse
Regulation:
Local
State
Federal
Strategv Identification
Outcome: By Starting with the barriers presented earlier, the committee identified as
comprehensive a list ofstrategies for consideration and future discussion in 2 ofthe 4 categories
(Finance/Policy Issues). Strategies were intentionally not debated or explained in great detail.
Finance
Constraints
• Increase State and Federal funding
• Leadership in developing community involvement to put pressure on State & Federal
• Potential local revenue streams:
•
•
•
•
•
Impact fee on large employers
50% ofRDA fimds to housing (state legislation)
General Obligation Bond
Sales tax(.250, temporary or otherwise)
Revenue sharing among localjurisdictions
• Real estate transfer tax
• Incentivize the development ofalternative kinds ofhousing (Le. Manufectured/Mobile, Co
op/Shared Housing)
• Property Tax incentives
Development Costs
• Streamline Permittihg
• Remove the veto power over individual projects exercised by San Jose City Councilmembers
(i.e. zoning by right)
• Provide some mitigating incentives:
• Density bonuses
Waving fees
Reduce land costs
Establish a pendent source offimding for non-profit developers
Costs of City Services/Fiscalization of Land Use
Identify innovative means ofoffsetting the costs ofcity services
Establish Tax laws which make sense(enact state legislation to return more property taxes to
localjurisdictions to cover the costs ofmunicipal services)
Spread city resources across the region(county)
Spread tax allocations on a per capita basis in the covmty (sales tax revenue sharing)
Speculation
Rent Control
Just Cause Eviction
Land banking
Land Trust
Taxes on windfalls
State Assistance Guidelines
Adjustments on high cost areas
Tax credits should be an entitlement
Look at the examples ofother states
Policy Isisues
Growth Controls
• County should take the lead on identifying land that can be developed
• Consider exemptions for affordable housing
• Penalize cities that do not meet their fair share housing assessments(local and state penalties)
• Coxmfy should use its influence with State HCD to hold cities accoimtable for being in
conpliance with their housing elements, (leverage: ifHCD finds that a cities housing element
is out ofcompliance, then their general plan is out ofcompliance and they are restricted firom
doing nearly anything)
Housing/Jobs Imbalance
• Require housing with any commercial/industrial development
• Establish a raoratorium on commercial/industrial development until suf5cient housing is
developed (to meet either the specific development's needs or the wider need)
• Create more living wage jobs
• Reuse/rezone land for housing
• Create more infrastructure/residential amenities in industrial areas for housing
Lack of a Coordinated Strategy
• Coordinate and keep it going
• Reestablish a County Inter-Govemmental Council(all localjurisdictions represented)
Establish a County Department ofHousing
Establish a County HOusii^ Commission
Require alljurisdictions to submit consolidated plans to County Housing Commission for
approval before submission to HUD
Establish a regional Discussion that will develop a common vocabulary on planning and
building issues.
Convene a Housing Summit ofexisting groups
jack of infrastructure
Cities can target infrastructure improvements toward where they want housing (incorporated
into capital improvement plans)
Establish a permanent local revenue source for such in^rovements
Construction Defect Litigation
Lead a region-wide push to lobby for State legislation to correct it.
Work with insurance companies to address the issues.
)ecreased Federal & State Housing Assistance
Educate and outreach to the community to build a housing constituency
Preservation ofAffordable units(HUD financed and otherwise)
Push cities to refiise to deal with firms that are in the conversion business
Establish a non-Profit community land trust
Create a permanent source oflocal financing for land trust and buy outs ofHUD financed
properties
Push for re-instituting HUD programs, new federal legislation
Create incentives for the developers to stay affordable
Property tax rollbacks/adjustments
Re-institute payments for damage to section 8 units(now there are limits that may be too low)
Transportation
Complete and ejq)and Light rail system
Connect to BART
^
^
Make fest passes/eco passes cheaper and more accessible to those living near transit
Increase frequency oftrips
Increase access/connections between transit and housing/jobs
(frequent free/inexpensive shuttles from rail corridors to high density housing clusters and job
centers)
VTA should purchase land for housing
Reuse ofVTA land for Housing (High density and affordable)
Create incentives to building housing near transit (infrastructure improvements, cheaper
finmcing,etc.)
• Increase density
• Transportation Management Plan
Next Steps; Process Alignment
Outcome; The group dii^ussed alternatives for moving forward. The agreed upon strategy was
to hold four strategy sessions for each ofthe barrier/issue grouping over the next 3 weeks. At
each ofthese meetings we will explore, discuss, develop and prioritize the strategies identified.
Because oftime constraints the strategy identification process did not occur for Community
Involvement or Process/Land Use Plann^ Section. That process will take place at the beginning
ofeach ofthose strategy meetings.
• Community Involvement
Thursday, July 26th
• Process/Land Use Planning Tuesday, July 31st
• Public Policy
Tuesday, August 7th
• Finance
Thursday, August 9th
Each meeting will take place at the Housing Authority at 6:30PM.
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Report
Strategy General Session -Wednesday, August 15th, 2001
Over the past month committee members have identified, examined, discussed andprioritized
recommendations addressingprimary obstacles toward the development ofhousing infour
strategy discussions grouped under topics ofCommunity Involvement, Process/Planning/Land
Use, Public Policy and Finance. Thatprocess reviewed arid debated over 70 strategies to create
a consensus on thefollowing list ofrecommendations that are consolidated intofour categories:
Legislation, Regional Leadership/Expanded County Role, Zoning/Plannirig/Land Use, and
Finance. Strategies are listed in order ofpriority and top recommendations will be the subject of
an Action Step discussion on August 28thfrom 5-9PM at the Housing Authority[505 W. Julian
St., San Jose]
Present: Chris Block,Poncho Guevara, Alyson Abramov^dtz, Candy Capogrossi, Tracy Chew,
Jung Choi, Betty Feldheym, Amy Glad, Steve GKckman,Ron Johnson,Emma McKeithen,Bill
McWood,Sarah Muller, DuniaNoel, Maria Romero-Aranda, Ben Spero,Paul Stewart, Greg
Tompkins, Suzanne Tobin, Saul& Billie Wachter, Heidi Wolf-Reid, Georgette Wong,.Dan Wu,
Paul Wysocki,
Strategy Recommendations
Finance
1.
Coimty should spearhead a County-wide effort to secure a permanent source oflocal
revenue for affordable housing. The RHAP Committee discussed a myriad ofpossible revenue
streams and by consensus offers the following as suggested sources:
• Use the Coimty's Redevelopment settlement with the City ofSan Jose.
• Support an increase in the percentage ofredevelopment tax-increment is directed toward
affordable housing(f-om 20% to 50%)and direct any settlements with cities toward a
Countywide housing pool.
• Create a Countywide sales-tax revenue pool for affordable housing.
•Support legislation that will create Housing Redevelopment zones where increases in property
tax-incr^ent is hmneled toward affordable housing.
While such a revenue Source should be used to subsidize development ofhousing along the
continuum ofthe County's housing need,the Committee fiirther recommends that a portion be
directed toward a fimd that can support infrastructure improvements in cities to incentivize
development ofaffordable housing and higher denisity housing.
'
[Timeframe: Short/Medium-term; Obstacles Addressed: Financial Constraints, Decreased
State/Federal Housing Assistance, Intensification of Use, Lack ofInfrastructure, Cost ofCity
Services/Fiscalization ofLand Use]
2.
The County should spearhead the development ofa local structure to spread tax
allocations County-wide (sales tax revenues on a per-capita basis for example).
[Timeframe: Medium/Long-term; Obstacles Addressed: Financial Constraints, Cost ofCity
Services/Fiscalization ofLand Use, Housin^Jobs Imbalance]
3.
The County should help establish a non-profit land trust that can purchase land/use
public pareels. Thus,take land acquisition costs out ofthe equation for the development and
preservation ofaffordable housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Speculation, Financial Constraints]
Regional Leadership/Expanded County Role
1.
The County should establish a Department ofHousing to both consolidate and expand the
County's role in the development ofaffordable housing Coimtywide. To tnaximize the impact of
enhanced Coimty activity in housing,the County should establish a County Commission on
Housing that would include representatives firom all localjurisdictions. The Commission would
not only oversee the fimctions ofa Housing Department, but would foster a collective dialogue on
issues ofhousing and provide a vehicle for regional action. Among the activities such an interGovemmental Commission should consider is educating other elected officials on the in:q)ortance
ofaffordable housing'development in their citieSj spearheading regional planning processes that
will mitigate the housing/jobs imbalance, and commentii^ on the housing elements ofindividual
cities to the State HCD.
[Timeframe: Short-term; Obstacles Addressed: Lack ofa Coordinated Strategy, Density/Zoning,
Lack ofPolitical Will]
2.
The County should take the lead in the development ofaffordable housing on publicly
owned land(County, State, City, VTA -owned parcels, etc.) and should change land use policies
on the l^d under its jurisdiction to incentivize the development ofaffordable housing and higher
density housing. Recognizing this is a dramatic departure fi-om current practice, the County
should lead by exan5)le.
[Timeframe:Short/Medium-term; Obstacles Addressed: Growth Controls, Lac^ ofa Coordinated Strategy]
3.
The County should invest significant resources in a Communications Strategy that will
enhance community support for the development ofaffordable housing and greater public
investment in housing as part ofthe infi-astructure (press relations, community outreach,
development ofcollaterals that will engage different constituencies in addressing the housing
crisis, etc.).
[Timeframe: Short-term; Obstacles Addressed: Lack ofPolitical Will, NIMBYism]
Other Key Recommendations:
•
In view ofthe fiict that rent burden has increased on middle- and low-income families, the
Coimty and local cities should study how they can provide rent relief. The County should take a
leadership role in this effort and actively advance the inplementation ofthe identified strategies.
[Timeframe: Short-term; Obstacles Addressed: Speculation, Lack ofPolitical Will]
•
The Cotmty should sponsor a design competition for architects to craft new forms of
housing (for example: work with private industry to come up with new types ofworker housing).
Awards could include grants, or publishing a book ofgood ideas.
[Timeframe: Short-term; Obstacle Addressed: Limited Varieties ofNew Housing]
•.
Create community processes/structures that will involve local residents and elected
leaders in neighborhood planning efforts to include affordable housing.
[Timeframe: Medium-term; Obstacle Addressed: Intensification of Use, NIMBYismJ
•
The County should support and strengthen efforts to create more living wage jobs.
[Timeframe: Short/Medium-term; Obstacles Addressed: Housing/Jobs Imbalance, Speculation]
•
The VTA should purchase land and reuse surplus parcels for housing especially high
density and affordable units.
[Timeframe: Short-term; Obstacles Addressed: Transportation, Lack ofPolitical Will]
Legislation
1.
The Coimty should take a lead role in advocating for reform ofthe property tax allocation
structure created by Proposition 13. The current system is widely perceived to have created
disincentives toward the development ofmore housing by cities.
[Timeframe: Long-term; Obstacles Addressed: Cost ofCity Services/Fiscalization ofLand Use]
2.
The County should take a leadership role in expanding Federal housing assistance by
rallying community support for the National Housing Trust Legislation and actively organizing for
similar support from other Bay Area communities. Furthermore,the County should spearhead this
effort by preparing an analysis ofexisting federal programs and how they work or do not work
here based on the cost ofhousing and developable land in our region.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal Housing
Assistance, Financial Constraints, Lack ofPolitical Will]
3.
The County should take a leadership role in expanding State housing assistance by rallying
community support for greater levels offunding for housing arid to feirly compensate regions with
higher costs ofliving. In addition to analyzing the efBcacy ofFederal programs given the disparate
costs here,the County should also prepare an analysis ofexisting ^te programs.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal Housing
Assistance, Financial Constraints]
Other Key Recommendations:
•
The County should support statewide legislation that will help enforce Housing Elements
developed by Cities. While corisensus was not reached by the RHAP Committee on the form of
sanctions that could be levied against cities, withhold fimdihg from cities out ofcompliance was
prioritized as a key tool.
[Timeframe:Short-Medium term; Obstacle Addressed: Weak Regulatory Guidelines]
•
The County should take a lead role in a Bay Area-wide lobbying effort for State
legislation correcting problems with Construction Defect Litigation.
[Timejrame: Short-Medium term; Obstacle Addressed: Construction Defect Litigation]
The Coimty should help introduce state legislation that will permit CEQA (California
Environmental Quality Act)exemptions for affordable housing development.
[Timejrame: Long-term; Obstacles Addressed: Regulation, Growth Controls]
Zoning/Planning/Land Use
1.
The County should lead efforts to increase density countywide using a multi-feceted
strategy; Leading by example by creating an affordable housing exenption to density limits for
housing development; Encouraging opr local political leadership ofto increase density and
affordable housing opportunities through planning and zoning policy discussions and pushing for
updates to General Plans; and creating incentives to higher density /affordable housii^
development through an infrastructure improvement component ofa local housing fimd.
[Timeframe: Medium/Long-term; Obstacles Addressed: Intensification of Use, Density/Zoning
Growth Controls, Land Use Policy]
2.
The County should lead an effort to create incentives to build housing near transit
(infrastructure improvements, cheaper financing, etc.).
[Timeframe: Medium-term; Obstacles Addressed: Transportation, Density/Zoning, Growth
Controls]
3.
At the Planning Department level: Fast track and prioritize affordable housing
development and encourage cities to the same.
[Timeframe: Short-term; Obstacles Addressed: Regulation]
Other Key Recommendations:
•
The County should support requirements for housing to be developed when any
significant commercial/industrial/retain/office development is proposed. By providing leadership
in a regional dialogue(an inter-governmental Housing Commission,for example)the County can
help introduce such policy tools that may help mitigate the impact ofrapid job growth and cjqpand
the conversation to the responsibilities oflocal employers to develop housing.
[Timeframe: Medium/Long-term; Obstacle Addressed: Housing/Jobs Imbalance]
•
The County should advocate and create incentives for mixed-use development in infill and
new communities(e.g. mid Coyote Valley).
[Timeframe: Medium-term; Obstacle Addressed: Land Use Policy]
The County should encourage cites to allow/incentivize secondary("granny") units in
existing residential areas
[Timeframe: Medium-term; Obstacles Addressed: Limited Varieties ofNew Housing,
Density/Zoning]
•
The County should create incentives for residential development m non-residential areas
(rezoning).
fTimeJrame: Medium/Long-term; Obstacle Addressed: Intensification of Use]
SANTA CLARA COUNTY HOUSING TASK FORCE;
SECTION IX
IMPLEMENTATION RECOMMENDATIONS
On August 17,2001,the Housing Task Force Steering Committee niet to discuss the
next steps in the process. The Steering Committee is comprised ofthe Co-Chairs
for each ofthe Working Group Sub-Committees, as well as representatives from
Sup. BealTs office, and the overall Project Manager. The roster(in alphabetical
order)is as follows:
Bonnie Bamburg, Surplus Government Land Co-Chair
Roger Barnes, Public Employees' Group Co-Chair
Chris Block, RHAP Co-Chair
Jean Cohen, Sup-Beall's Office
Poncho Guevarra, RHAP Co-Chair
Caroline Judy, Sup. Beall's Office
Will Lightboume, Special Needs Housing Co-Chair
Frank Motta, Special Needs Housing Group Co-Chair
Alex Sanchez, Surplus Government Land Co-Chair
Kristy Sermersheim, Public Employees' Group Co-Chair
Ray Villareal, Interim Housing Coordinator and Land Trust Group Chair
Paul Wysocki,Project Manager
The Steering Comimttee reviewed the process to date, and discussed the next steps,
including the contents ofthis Status Report. In addition, the Committee discussed
the implementation ofthe overall objectives and recommendations in the following
context.
The Vision articulated by Sup.Beall in February ofthis year has been embraced
wholeheartedly by the Task Force members. Many,ifnot most, ofthe Task Force
membership are people who have spent years, if not decades, in the field of housing.
They are Service Providers, Community Advocates and Activists, Housing
Developers, Financiers, Businesspeople, Members ofthe Faith Community, Labor
Representatives, Government Elected and Appointed Officials, and Other Interested
Parties who have devoted a great deal oftime, energy, money, and hope in the
process Of housing our citizens.
The past 90 days represents an enormous investment ofbrainpower, ideas, and
discussion by people who now have an extraordinary expectation that the
recommendations advanced may lead to significant results. They are also people
who have a great deal ofe5q)erience in group processes, especially in the political
arena. They are well aware that momentum in such work develops slowly, and
requires earnest persistence and follow-up to continue.
With this in mind,the Steering Committee respectfully suggests that they, the
Steering Committee as currently comprised, act as a "Transition Team", overseeing,
as they have been, the continued development of mid- and long-term action steps, as
well overseeing the implementation ofshort-term strategies. There may well be in
the fiiture, a re-organization ofcounty stafiBng around housing. However,that
would be in the fiiture, and a loss of momentum, as well as institutional memory
would result if steps are not taken immediately to continue this work. The Steering
Committee would like to "champion" the continued work.
Some ofthe Steering Committee members are also County employees, and thus
have the requisite knowledge and e^qperience to shepherd the continued process
through the bureaucracy oflocal government. The Steering Committee members are
also well versed in housing issues, and are certainly fiilly aware ofthe content ofthe
recent process.
In addition, many ofthe recommendations would involve other organizations and
institutions that must be consulted and invited to join the process. The process of
the past 90 days was certainly not intended to include discussions with these groups.
Ifthe County is to consider bold action in convening meetings with other
governmental bodies, perhaps through the Inter-Govemment Council, a process
must be prescribed that would allow for that action to begin.
Some ofthe items io consider in additional Steering Committee work might include:
• Additional research into Housing Need, using conq)lete Census and other
data;
• Additional research by an Urban Economist(funded by other sources)into
the affect ofsupply and demand on housing prices and historic housing
subsidy levels.
• Processes by which representatives from other jurisdictions can become
included in this work (State Assemblymember Manny Diaz has, for
example, appointed a Select Committee on Silicon Valley Housing; the
Housing Task Force work could be integrated into the work ofthat
committee);
r
• Policy and Legislative recommendations could be more fully developed
and implemented;
• Mid- and long-term strategies could be more fully discussed and
developed; and,
• Potential County housing stafiBng recommendations.
The Steering Committee Members are also mindful ofthe need for efficiency and
swift operation. They have proposed that such a "Transition" efifdrt be limited to a
one year term; that it be a professionally facilitated process; that specific outcomes
based on the above items be described; that periodic reports to the Board of
supervisors be delivered; that a method ofcommunication to the public be
developed; and that the outcomes be manageable and attainable in the time
prescribed.
We,the members ofthe Santa Clara County Housing Task Force Steering
Committee wish to express our gratitude to the Board of Supervisors and its Chair,
Sup. Beall, for allowing us to participate in this historic and veiy important process.
We have learned a great deal fi*om each other, as well as about ourselves as
dedicated citizens who want to make a difference in our community. We hope that
this Work will find its way into sustained and significant results, and that the future
ofhousing opportunities in Santa Clara County becomes brighter for all ofour
residents.
Respectfully submitted.
The Santa Clara County Housing Task Force Steering Committee
_
TASK FORCE
"PUTTING IT ALL TOGETHER"
November 27,2001
SANTA CLARA COUNTY HOUSING TASK FORCE:
CONTENTS
SECTION I
ACKNOWLEDGEMENTS
SECTION II
EXECUTIVE SUMMARY
SECTION III
RECOMMENDATIONS
SECTION IV
A VISION
SECTION V
A CALL TO ACTION
SECTION VI
A PROCESS
SECTION VII
THE TOUR WORK GROUPS"
REPORTS/MINUTES
1. COMMUNITY LAND TRUST
2. GOVERNMENT SURPLUS LAND
3. PUBLIC EMPLOYEES HOUSING
ASSISTANCE
4. SPECIAL NEEDS HOUSING
SECTION VIII
REGIONAL HOUSING ACTION PLAN
(RHAP)COMMITTEE
1. RHAP COMMITTEE: RESEARCH PHASE
a. HOUSING NEED
b. HOUSING BROADLY DEFINED
c. HOUSING AND OTHER REGIONAL
ISSUES
d. AFFORDABLE HOUSING
2. RHAP COMMITTEE: STRATEGY PHASE
SECTION IX
IMPLEMENTATION RECOMMENDATIONS
1
SECTION X
APPENDIX: ADDITIONAL RESEARCH AND
COMMENTS PROVIDED BY PARTICIPANTS
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION!
ACKNOWLEDGEMENTS
Housing Task Force
The Housing Task Force has brought together a unique and qualified group
of our housing community. Listed below is just a partial list of those who
have supported our efforts and who have dedicated many hours of hard work
to this process.
ACORN
Affordable Housing Network
Alliance for Community Care
American Red Cross
ATU-Local 265
Catholic Charities
Cambrian School District
CHAM
City ofSan Jose
City of Milpitas
Fremont Union High School District
Housing Authority ofSanta Clara County
Immigrant Action Network
Innvision
Los Gatos Union School District
Oak Grove School District
PACT
Project Match
San Jose Unified School District
Santa Clara County Department ofDrugs and Alcohol
Santa Clara County Department of Mental Health
Santa Clara County Employee Services Agency
Santa Clara County Foster Care Service
Santa Clara County General Services Agency
Santa Clara County Housing and Community Development Program
Santa Clara Coimty Planning Department
Santa Clara County Public Guardians Office
Santa Clara County Social Services Agency
Santa Clara Unified School District
Santa Clara Coimty Association ofRealtors
SEIU 715
Silicon Valley Manufacturing Group
Silicon Valley Independent Center
St. Joseph's Cathedral
Town ofLos Gatos
Tri-County Apartment Association
Valley Transportation Agency
Working Partnerships USA
Alyson Abramowitz
Cindy Amado
Bill Amopp
John, Moore
Bonnie Bamburg
Roger Barnes
Allison Bamett, Office of Assemblymember John Dutra
Chris Block
Larry Boales
Courtney Bober
Bob Brownstein
Sheri Bums
Christine Burroughs
Bob Campell,
Candi Capogrossi
Izi Chan
Tracey Chew
Charlie Chew
Consuelo Collard
Chuck Corr
Trish Crowder
Sandy Decker, Town ofLos Gatos
Jane Decker
Barry Del Buono
JeffDennison
Bob Dougherty
Ann Draper
Mike Eaton
Rebecca Elliot
Michael Elliot
Yolana Engiles
Betty Feldheym
Vivian Frelix-Hart
John Erkman
Kathy Espinoza-Howard
Tom Fink
Nancy Fowler
Amy Glad
Steve Glickman, Town of Los Gatos
Margaret Gregg
Poncho Guevara
Corky Gutierrez
Lydia Grybos
Jeffrey Hare
Art Henriquez
Maiy Hughes
Ron Johnson
Melina Jovanovic
Diana Kalcic
Dennis Kennedy, City of Morgan Hill
Kristie Kesel
Naphtali Knox
MarkLazzarini
Will Lightboume
Gene Longinetti
Bill McWood
Lisa Merlin
Sharon Miller
Dennis Mills
Frank Motta
DuniaNoel
John Ordonex
Rex Painter
Marcel Pajuelo-Schwartz
Andrea Papanasmassiou
Christy Paul
Sandy Peny
Steve Phillips
Mary Reed
Bob Reid, Office of Assemblymember Manny Diaz
Felix Reliford
Julie Render
Louie Rocha
Maria Romero-Aranda
Alex Sanchez
Denise Scovel
Kristy Sermershiem
Barbara Sema
Edith Sona
Steve Speno
Ben Spero
Paul Stewart
Neil Struthers
Kathy Thibodeaux
Greg Tomkins
Ray Villarreal
Saul Wachter
Billie Wachter
Phyllis Ward
Mike Weinstein
Gertrude Welch
Jim Weston, Office of Senator John Vasconcellos
Heidi Wolf-Reid
Dan Wu
Paul Wysocki
Richard ZaVala
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION II
EXECUTIVE SUMMARY
SANTA CLARA COUNTY HOUSING TASK FORCE REPORT
FORWARD
It is with a great deal of gratitude and satisfaction that I submit this report to the Board of
Supervisors(BOS)on behalf ofthe Santa Clara Coimty Housing Task Force(HTF). My thanks
go first to BOS Chair Beall for allowing me the opportunity to serve as HTF Project Director.
This project has been an enlightening and challenging experience, and I am humbled by the level
ofknowledge, capacity and dedication 1 have observed in the dozens ofpeople 1 encountered
along the way.
1 also owe a speciaLdeht to Caroline Judy and Jean Cohen ofSup. Beall's ofSee for their tireless
effort over many,many long hours; to County Executive Richard Wittenberg,for his willingness
to consider our proposal in the face of a looming fiscal crisis; to Interim Housing Coordinator
Ray Villareal, for his devotion to the process while shepherding the four HTF Work groups
imder his supervision; and to the Steering Committee members who guided their groups: Chris
Block and Poncho Guevarra ofthe Housing Trust of Santa Clara County,for the Regional
Housing Action Plan Committee; Alex Sanchez,Executive Director ofthe Housing Authority,
and Bonnie Bamburg,Director ofNew Development for Community Housing Developers,for
the Government Surplus Land Committee; Will Lightboume, Director ofSCC Social Services
Agency, and Frank Motta,Program Officer for Corporation for Supportive Housing,for the
Special Needs Housing Committee; and Roger Barnes, Director ofEducation Partnerships for
Santa Clara Unified School District, and Kristy Sermersheim, Executive Secretary-Vice
President ofSEIU Local 715 for the Public Service Employee Housing Assistance Committee.
Countless other county stafffrom various departments also contributed time, expertise, and
support as well.
Regarding the report, let me be clear that 1 am not the author, nor even the editor. My role
during this phase of work has been that ofa part-time director, overseeing and compiling work
and information created in countless meetings, and reviewing hundreds of pages ofdocuments.
Let me also add praise for my colleague, Susan Silveira, who performed a valuable function by
reading and synthesizing rnorc than 26 reports produced by other groups that served as a basis
for the work ofthe Regional Housing Action Plan Committee, one ofthe five HTF Work
Groups. In addition, Ms. SUvcira helped to review,compile and collate the contents ofthis
report.
In addition, let me also point out that this document is not intended to he a "final report." The
work that has just been completed is, in fact, simply the first phase of a lengthier project. Many
ofus recognized early on that achieving the identified goals ofthe various committees would
require more discussion, additional participation by interested parties, and time to achieve
consensus among the cities, school districts, and other jurisdictions in the county. The
recommendations contained herein will require additional scrutiny and disctission, as well as
consideration ofimplementation aspects, including fiscal impacts. This document serves to
inform all readers ofthe scope and nature ofthe work,as well as ofthe basis for eventual
recommendations.
However,it is also extremely important to note that this document covers the very intensive and
comprehensive processjust completed,and that its "update" status is not meant to sell it short. A
great deal ofresearch and analvsis was conducted during this phase. And supplemental research
on certain aspects ofthe housing crisis continues. (Some ofthat newer research is included in
this document, albeit in somewhat raw form). I urge the reader, and subsequent Steering
Committee convenors to make use ofthis valuabje information. Other groups and efforts, too,
may find this data useful.
In fact, local State Assemblymember Manny Diaz has recently convened a Select Comrmttee on
Silicon Valley Housing,appointing many to his committee who have also sensed on the HTF.
We have encouraged Assemblymember Diaz to make use ofsome ofthe HTF work. In a
hearing convened in November, Assemblymember Diaz and several of his Assembly colleagues
along with representatives from State housing agencies heard about the HTF process, and voiced
great interest in the regional aspects ofit
Finally, let me state my fervent hope that the BOS will endorse this report, vyithout discussing
the numerous recommendations. This is not the appropriate time to consider specific
recommendations, other than those noted in Sup. BeJill's tr^smittal memo. However,the work
ofcreating housing affordable to all Santa Clara County residents is far from finished; we
encourage the BOS to lend its support, and to promote the leveraging potential that a regional
housing effort could produce.
Thank you for this opportunity to be ofservice.
Respectfully submitted.
Paul A. Wysocki
November 26,2001
SANTA CLARA COUNTY HOUSING TASK FORCE
REPORT SUMMARY
INTRODUCTION
It has been the mission of the Housing Task Force to thrust the Comty into a new public leadership
role as "the countymde affordable housing champion." Consideration ofjurisdiction, protocol and
tradition were recognized and respected, hut the severily ofthe crisis and die lack of comprehensive,
compelling solutions inspired committee members and took precedence above aU else. The prevailing
sentiment has been that, vfiile the region'sjurisdictions have done many things to address the housing
crisis; it has not been enough, and it is time to coordinate land use and housing decisions with the
greater interests ofthe region.
Housing advocates see the Housing Task Force process as an opportunity to create a countywide
affordable housing "champion." Others see opportunities for the County to fill several major regional
policy and planning deficiencies, ■vsiiile some see the County becoming more vocal at the state and
federal levels. All however, envision groundbreaking policy that unites all jurisdictions, public
institutions and agencies into a synergistic effort to mitigate the housing crisis.
THE HOUSING TASK FORCE PROCESS
The Housing Task Force (HTF) was created by Supervisor Beall in his State of the County address in
January, 2001. After several months of planning by a Steering Committee, the HTF first met on May
17, 2001 and was comprised of over 150 professional, volunteer housing advocates, developers,
service providers, city and county housing staff and elected officials. All areas of the county and all
affordable housing interests were represented. The HTF was divided into 5 subcommittees; 1)
Regional Housing Blueprint; 2) Special Needs Housing; 3) Public Employee Housing Assistance; 4)
Government Surplus Land; and 5) Community Land Trust. Four committees met approximately
every two-three weeks from late May through August, while the Countywide Housing Blueprint
Subcommittee met until mid September.
Each Subcommittee was advised of the time constraints of the process, and recognized their work was
limited to developing broad policy and strategy recommendations that would be refined later. Within
their subject area, the Subcommittees conducted the following analysis:
Define the affordable housing problem and needs
Identify barriers to affordable housing, especially in Santa Clara County
Identify key stakeholders in affordable housing and resources
Develop strategies using short, medium, and long term goals
Objectives must be focused
Recognize/redefine the County's role in housing production, creation, and preservation
Recogiuze the work of others and if possible, build upon that
SCCHTF Summaiy to BOS
Dated 11^9/01
As work ofthe Subcommittees progressed, policy and strategy recommendations initially focused on
the specific concerns ofthe group, but quicldy grew into far-reaching recommendations. Many ofthe
recommendations overlap and most are still in a very rough form,because again,the process and time
constraints did not lend itselfto developing a refined product. It is, however,the intention ofthe
Steering Committee that the recommendations will be reworked and fiirther developed through a
"transition period".
STRATEGY AND POLICY RECOMMENDATIONS
This summary briefly groups the major recommendations of the Subcommittees by overall project
objectives diat the Steering Committee intends to accomplish during the 'transition phase." The
overall project objectives as formulated by the Steering Committee are as follows:
1) Regional Leadership and Advocacy
2) Infrastructure and Organization
3) Acquisition and Allocation ofResources
L Regional Leadership and Advocate
1) The Board of Supervisors should adopt a resolution declaring a "State of Affordable
Housing Emei^eney" and announce a number of major action steps to be taken along
many fronts. Possible action steps may include but are not limited to the following and
the &al resolution has not yet been approved by the Steering Committee.
2) In partnership with local jurisdictions and institutions, the County should establish a
countywide Housing Advisory Commission (HAC) for planning and implementing a
regional housing action plan. Key issues the regional forum will address include:
•
•
•
•
The use ofpublicly owned surplus land for affordable housing
Creating affordable housing opportunities for all public employees
Creating affordable housing opportunities for special needs persons and families
Developing comprehensive, consistent favorable land use and affordable housing
policies throughout the county
• Addressing the jobs/housing imbalance in the county
3) In partnership with local public jurisdictions and institutions the County should initiate a
countywide Housing Education and Finance Assistance Program for all public employees.
• This multi-jurisdictional program will establish a revolving loan program and
provide rental and home buying assistance to pubUc employees in Santa Clara
Coimty.
SCCHTF Summary to BOS
Dated 11/29/01
4) The County should take a proactive, local leadership role becoming the affordable
housing advocate tihroughout the county. In this capacity, the County should facilitate
the following:
• Bringing together developers, service providers, city, state and federal agencies
and resources for the purpose ofdeveloping affordable housing projects
• Advocate for favorable land use policies and set asides for affordable housing
developments
• Advocate for cities to allocate 50% of their redevelopment funds to affordable
housing
• Further develop existing lobbying resources
5) The County should become an active and visible advocate at the state and federal levels of
government. The County should work for the following:
• Prepare an analysis of how state and federal housing programs in die county work
or do not work here
• Advocate for fiinds, tax incentives and programs (i.e.. National Housing Trust)
aimed at developing affordable housing in high cost counties throughout the state
• Advocate(on behalf oflocal nonprofits and service providers) developing flexible
conditions and consistent reporting requirements on the use of state and federal
funds for affordable housing
• Advocate for Housing Element reforms
• Advocate for construction defect legislation
• Encourage our state delegation to lead a large-scale effort to review and reform
state licensing requirements and code
• Advocate for legislation establishing Housing Redevelopment Zones
• Advocate for reform ofProposition 13 and its many variants
n.Infrastnictiire and Organization
i
1) The County should redefine vhat constitutes surplus land and compile an inventory of all
vacant or surplus land owned by local, state and federal governments, institutions and
agencies in the county.
2) The County should create an Affordable Housing Unit to coordinate the development of
new County housing service efforts, as well as support existing efforts, including but not
limited to the following:
• Facilitate coordination ofcurrent housing efforts ofCounty departments
• Gather critical data and determine housing needs of County special needs clients
and public employees
• Establish affordable housing information services (Housing Education Assistance
Program)for special needs clients and public employees
• Seek and acquire new resources
SCCHTP'Summaiy to BOS
Dated 11/29/01
• Provide resource acquisition assistance to developers and service providers
• Use County resources to facilitate local projects
• Develop marketing strategies and materials directed towards the county in support
ofaffordable housing
• Advocate for affordable housing issues at the local, state and federal levels of
government
3) The County diould establish a Special Needs Housing Education and Assistance program
for special needs clients and housing service providers.
• Services provided by the County would include ongoing rental and down payment
assistance, as well as emergency assistance and life skills training.
4) The County should establish "best practices" policies in Special Needs Housing
managernent,including;
• Developing ways to encourage and reward successful programs
• Facihtating the development of new community based special needs housing
models and developing innovative designs that would be effective in Santa Clara
County
5) The County should establish a County Housing Department for building very low and
extremely low-income housing for special needs clients and public employees. The
County Housing Department should:
Issue building permits for affordable housing projects on County surplus lands
Work with cities on building affordable housing projects on County
unincorporated lands
Become an insurer or guarantor offinancing for affordable housing projects
Establish a temporary loan fimd for developers of affordable housing projects
Establish a rental housing assistance program to buy down rents
Utilize and/or leverage service contracts to facilitate the development ofaffordable
housing
Provide "catalyst financing" to assist nonprofit developers
nL Resources Acquisition and Allocation
1) The County should move immediately to initiate the establishment of a countywide
"Affordable Housing Land Bank"(AHLB), to hold and manage "gifted" or purchased
lands for the purpose ofdeveloping affordable housing.
2) The County should make available all vacant or surplus lands owned by the County to the
Affordable Housing Land Bank and urge all public jurisdictions, institutions and agmcies
in Santa Clara Coimty to do the sanie.
SCCHTF Sununary to BOS
Dated 11/29/01
3) The County Housing Department diould be engaged in an on going effort to acquire
resources including permanent ftmding for countywide affordable bousing programs.
Potential new resources and fimding could include but not be limited to the following:
Surplus Government Land for building affordable bousing units
Units/Land acquired through Inclusionary Zoning, Density Bonuses
Special Tax districts
Bond Financing
Housing development/Commercial development fees
Local taxes
Local foundations
Pension Funds
Redevelopment Funds
Additional state and federal assistance
CONCLUSION
The Housing Task Force Steering Committee is recommending the Board of Supervisors ^point the
Steering Committee to oversee the refinement and implementation of the recommendations of the
Housing Task Force report. The Steering Committee will report to the Board of Supervisors and the
HLUET Committee of its progress on a regular basis as well as take (Section from the Board,
Committee, and County Administration.
SCCHTF Summaiy to BOS
Dated 11/29/01
SANTA CLARA COUNTY HOUSING
TASK FORCE
"PUTTING IT ALL TOGETHER"
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION
RECOMMENDATIONS
THE COMMUNITY LAND TRUST SUBCOMMITTEE RECOMMENDATIONS:
Short-term Recommendations:
1. Objective: The Subcommittee recommends the Board of Supervisors sponsor
the creation of a countywide,"Affordable Housing Land Bank".
A. The County should immediately assign a small working group to find an
appropriate partner to draw up the Articles ofIncorporation, file with the state,.
draft bylaws,recruit a Board ofDirectors etc., and formally establish the
"Santa Clara County Affordable Housing Land Bank"(AHLB).
B. The purpose ofthe AHLB would be to advance the development ofaffordable
housing opportunities in Santa Clara County, with special emphasis on low,
very low and extremely low-income housing.
C. The AHLB would be charged to accept, hold and admioister land,focilkies
and fimds contributed to the AHLB.
D. The AHLB would be charged to acquire and sell lands for the purpose of
giving the organization the flexibility and means to be effective developing
affordable housing opportunities.
E. The Corrnty should make the first contribution ofappropriate surplus land to
the AHLB and begin a public campaign to encourage other jurisdictions,
corporations,foundations and private individuals to do the spme.
F. The AHLB must establish broad cominunity support for its efforts to d[evelop
affordable housing by establishing partnerships between the County, Cities,
for profit and nonprofit developers, service providers and local phfianthropic
organizations.^
Mid-term Recommendations:
1. Objective: The AHLB Board of Directors should establish oi^anizational goals
and criteria for the affordable housing projects it will support.
A. Lands administered by the AHLB would be made available for development
ofaffordable housing opportunities for low, very low, and extremely low
income populations with emphasis placed on housing opportunities for the
following:
'
a. Public employees
b. Non profit service workers
c. Special Needs Populations
d. Working Poor Families
^
B. The AHLB would support those projects that offered opportunities for
homeovraership and rental housing assistance.
C. Homeownership would be available to those who earn less than 80% ofthe
area median income.
D. Rental Assistance would be available to those who earn less than 50% ofthe
area median income.
E. The AHLB would give preference to those projects that promoted the
community interests by adhering to smart growth principles.
F. The AHLB would establish other goals and criteria as needed.
Long-term Recommendations;
1. Objective: Over the long term,the AHLB must be engaged in an active
campaign of soliciting available lands throughout the county for the
development of affordable housing.
A. The following jurisdictions and private and nonprofit entities are potential
sources for donated or discoimted land that may become available to the
AHLB.
a. Local Governments
b. Cities
c. County Agencies
d. School Districts
e.
f.
g.
h.
i.
j.
Special Tax Districts- VTA,Water District, Sanitation, Open Space etc.,
State & Federal agencies
Foundations
Nonprofits
Large, local companies
Abandoned,foreclosed, derelict or distressed properties
k. Private citizens
1. Objective: Over the long term,the AHLB.must acquire a source(s) of ongoing
funding for the purpose of buying and administering lands.
A. The following potential sources offimding that may become available to the
AHLB.
a. CDBG & Home Funds
b. Housing Trust and other Foimdations
c. Other HLT)programs
d. State HCD and CHFA programs
e. Pension Fimds
f. Lenders Looking for CRA credits
g. Fannie Mae,Freddie Mac
h. Local Governments
i. City Redevelopment Agencies 20% set aside funds
j. In-lieu fees firom development
k. inclusionary zoning assets
1. passage ofa local tax for land acquisition
m. job creation linkage fees
GOVERNMENT SURPLUS LAND SUBCOMMITTEE RECOMMENDATIONS:
Short-term Recommendations
1. Objective: Develop strategies for overcoming the barriers to using government
owned surplus lands for affordable housing.
A. The Board of Supervisors should adopt a resolution deelaring a "State of Affordable
Housing Emergeney" and urging the following actions:
a. The County's intent to use all vacant or surplus lands owned by the
Coimty for the purpose ofdeveloping affordable housing;
b. All local, state and federaljurisdictions including special tax districts in
the county to join with Santa Clara County making their own surplus lands
available for the production ofaffordable housing;
c. The County will hire a consultant to compile an inventory of all vacant or
surplus land owned by local, state and federal governments in the county,
including special tax districts that also own surplus land in the county;
d. The County will establish a new process for evaluating and then deelaring
which County owned lands are considered surplus or excess land,thus,
making such lands available for affordable housing development;
e. The County strongly reafBrms its intention to follow through on its own
stated objectives in the SCC General Plans' Housing Element;
f. Our state delegation to sponsor legislation requiring localjurisdictions to
include in their Housing Elements a section, describing in detail all vacant
and "surplus lands" owned by the jurisdiction, including their intentions
for future use and timeline. The group would like to see legislation
making Santa Clara County a pilot project.
g. "Surplus Lands are vacant or under utilized lands or structures that have
not had clearly defined uses the past 5 years and do not have defined uses
over the next 5 years. Surplus lands also include "air rights" where
mixed-use developments are suitable for affordable housing projects".
B. The County should develop a countywide Affordable Housing Land Bank, outside of
County government,to hold & manage donated or purchased land for the singular
purpose ofdeveloping affordable housing.
1. The County Land Bank would seek initial fiinding from localjurisdictions,
RDA's,the Housing Trust and private and philanthropic sources.
2. All localjurisdictions and the state would make contributions to the "County
Land Bank"for the single purpose ofbuilding permanent affordable housing
developments.
3. The County Land Bank would also be empowered to purchase government
surplus lands for affordable housing developments.
4. The Land Bank would also be empowered to purchase private lands or
residential buildings for affordable housing developments or rehabilitation.
5. The County should require that the Land Bank will work in partnership with
the SCC Housing Trust, the SCC Housing Authority or a local non-profit
development corporation.
6. The County should urge jurisdictions to deposit "surplus lands" in the County
Land Bank for a specified period oftime. Ifthe surplus lands are not utilized
by the jurisdiction within the specified time,the Land Bank can either sell the
property with the proceeds going towards affordable housing, or advance the
development ofthe property into affordable housing.
7. The Land Bank should hold annual public hearings on the disposition of
jurisdictions surplus lands and there intended usage,filing a report each year
with the Board of Supervisors.
PUBLIC EMPLOYEES ASSISTANCE SUBCOMMITTEE
RECOMMENDATIONS;
Short Term Recommendations
The following objectives can be achieved in a relatively short period oftime and wiU
give the County the necessary information for crafting a program that meets the needs of
all public employees.
Objective: The County must acquire meaningful data and information regarding
the impact the housing crisis is having on the ability of public jurisdictions and
institutions to recruit and retain public employees.
•
•
•
The County should collect data on local economic trends, salary levels,
turnover rates,job vacancy rates, housing costs, caseloads and anecdotal
information to aid in identifying solutions,
The County should find out what public employees really want or need by
conducting surveys and focus group discussions.
The County should conq)are and evaluate information collected with other
similar information collected fi-om other areas.
•
The County should seek partnerships with other localjurisdictions and
agencies to contract for the research and evaluation ofthe problem
Objective:
The County should establish a countywide Housing Education
Assistance Program for all public employees.
•
•
•
•
The Program will provide information and educational services regarding:
► Home buying process
>• Rental process
► How to take advantage of existing programs
► Using transportation to maximize living decisions
The program will explore other incentives that jurisdictions are using to attract
and retain quality employees.
The program should develop a marketing program to inform potential public
employees as to why Santa Clara County is such a great place to live despite
the high cost of hoxising
The County shoiftd partner with other interested local agencies for support and
assistance
•
The County should develop at countywide Housing Services & Information
web site for public employees to access housing information and services.
Medium Term Recommendations
Once a needs assessment is completed and information is evaluated and organized in a
meaningfijl way,the County can implement the following objectives.
Objective: The County should establish and/or jpartner with existing organizations
in implementing a countywide Housing Assistance Program for public employees.
> The program will provide home purchase financial assistance including:
►
►
►
Down payment assistance
Monthly mortgage payment assistance
Closing cost assistance
► Service to help home buyers /take advantage of all available programs
► Seek support and financial assistance fi:om PERS & STRS
> The program will provide rental assistance including:
►
►
Monfiily rental assistance
Reduced move-in costs - security deposit assistance
►
Information service to locate afifordable units
►
Service to match roommates
► Seek support iahd financial assistance fi-om PERS & STRS
Objective:
'
The County should convene a countywide Housing Advisoiy
Commission made up. of elected officials and citizens whose purpose would be to
develop regional solutions to the housing crisis. The HAG would be chained to:
•
Create partnerships with other groups and jurisdictions that are working to
solve the public employee housing crisis and consolidate efforts at solving
the problem;
•
•
•
•
Work with our state and federal delegations and appropriate agencies to
provide tax incentives for public enq)loyees who live in high cost areas;
Work with om state and federal delegations and appropriate agencies to
provide tax incentives for property owners and developers to provide
afifordable housing opportunities for public employees;
Partner with local jurisdictions to efifect land use policies that result in
afifordable housing units being created;
Work to change building policies in the county to encourage the formation
of more rental and afifordable for-purchase units;
• Wotk to in^rove the transportation infi*astructure so public employees can
•
get to and from work easily, no matter where they live;
Explore the feasibility ofbuildiug employee housing outside of the county
and then provide eflScient transportation specifically for employees;
• Explore the feasibility ofincreasing the number ofmanufactured home
parks in the county;
• Develop an ongoing education campaign to build political and community
support for the development ofaffordable housing.
Long Term Recommendations
Over the long term the County should implement the following objectives towards the
development ofaffordable housing options for public employees.
Objective: The County should establish a Housing Department. One of its many
purposes would be to advance the development of affordable housing opportunities
on County surplus land or on unincorporated lands for County publie employees.
The County Housing Department would be chained to:
• Acquire existing residential structures and convert them to Coimty employee
housing;
• Explore the availability ofhousing at Moffett Field;
• Build "transitional housing" or "commute units" for public employees;
• Develop a financing methodology similar to a Credit Union or employee fimded
casualty assistance fimd;
• Provide incentives for builders to create more affordable housing units
specificalfy for public en:q)loyees;
• Encourage building affordable rental or for-purchase housing on Coimty or local
agencies owned land.
Objective: The County should develop new resources and/or funding sources for
the purpose of developing affordable housing opportunities.
Potential new
resources or funding could include but not be limited to the following:
Surplus Government Land for building affordable housing units;
Units/Land acquired through Inclusionaty Zoning,Density Bonuses;
Special Tax districts;
Bond Fiuancing;
Housing development/Commercial development fees;
Local taxes;
Local foundations;
Pension Fimds;
Additional state and federal assistance.
SPECUL NEEDS HOUSING SUBCOMMITTEE RECOMMENDATIONS;
Short Term Recommendations:
1) Objective: The County will take a proactive, local leadership role becoming the
primary advocate for developing very low and extreme^ low-income housing
throughout the county for special needs clients. The County should:
> Become a feciKtator ofdevelopments for special needs housing by
bringing together county resources, cities, developers and service
providers;
> Work towards changing local land use policies to include more special
needs housing components;
> Advocate linking local land use approvals and fimding assistance with
>
>
>
>
>
tradeoflfe benefiting affordable housing developments with appropriate
services for special needs populations;
Advocate attaching to core business functions ofthe local economy(in
lieu fees, exaction's, etc.,) the financing ofaffordable housing and/or
housing services for special needs populations;
Advocate that all government surplus lands(or proceeds from the sale
of) be dedicated to the development ofvery low and extremely lowincome housing;
Provide resource development and grant writing assistance to Coimty
agencies and housing and service providers to facilitate the
development ofmore low-income housing;
Work to ensure Community Development Block Grant fimds are
allocated to meet Coimty low-income housing objectives;
Evaluate potential revenue sources that could be used for the
development ofmore low-income housing and e5q)lore ways to
establish a permanent source offunding.
2) Objective: The County will take a proactive leadership role at the state and
federal levels of government for developing very low and extreme^ low-income
housing throughout the county for special needs clients.
> Advocate for more resources and incentives in high cost areas to
encourage the development ofvery low and extremely low-income
housing;
> Work with various local funding sources, as well as state and federal
agencies on developing flexible conditions and requirements on the
use offimds for Special Needs Housing;
> Work with various local fimding sources, as well as state and federal
agencies on developing consistent reporting requirements on the use of
fimds for Special Needs Housing;
> Request our state delegation to lead a large-scale effort to review and
reform state licensing requirements and code.
3) Objective: The Board of Supervisors will create within County government an
Affordable Housing Unit to coordinate and support new and existing County
housing service efforts, acquire new resources, gather and manage housing data
and insure all departments are working together using resources efficiently. The
County should:
> Task the housing unit to coordinate the special needs housing eflforts
undertaken by the separate agencies and departments;
> Develop the means for acquiring and managing critical data relative to
the housing needs ofspecial needs populations throughout Santa Clara
Coimty;
> Develop a standardized intake system among County agencies to
better determine the housing needs ofCoxmty clients and fecilitate
effective housing placement;
> Support the development and dissemination ofan information data
base on available units or beds for special needs individuals;
> Make County housing information easily availabte to the service
operators, developers to assist them in acquiring fimding;
> Make Coimty information available to cities and the community at
large to demonstrate the severity ofthe problems &ced by special
needs populations.
Mid-term Recommendations:
1) Objective: The County and Cities will establish a countywide Housing Advisory
Commission(HAC)as a regional forum for discussing and acting on the entire
spectrum of housing issues. The HAC should:
> Establish countywide inter-jurisdictional housing agreements for the
creation ofspecial needs housing development and/or services;
> Establish inter-County rektionships relative to special needs housing
and services issues;
> Establish a countywide Land Bank,comprised ofsurplus land and
financial contributions ofaU localjurisdictions, to be administered by
the HAC or other non profit agency,for the single purpose ofbuilding
and rehabilitating low, very low and extremely low income housing;
> Work with cities on siting appropriate special needs housing projects
on surplus gbyemment owned lands, or on County unincorporated
land;
> Work with cities on expediting development ofspecial needs housing
projects by seeking waivers or variances on LAFCO rules,
transportation services rules, density rules etc.;
> Develop countywide housing goals for special needs populations based
on needs assessments and inventory data, and advocate for regional
support to meet those goals;
> Develop a countywide Housing Action Plan to comprehensively
address the housing needs ofall Santa Clara Coimty residents, and
enlist regional sppport for the in^lementation ofthis plan.
1) Objective: The County will seek"best practices" in Special Needs Housing
management.
> To insure County agencies and clients are getting the best housing
services possible, the County should explore ways to encourage and
reward successful programs.
> The County should explore different community based special needs
'housing models to find innovative designs that would be effective in
Santa Clara County.
Long Term Recommendations:
1) Objective: The County will establish a Special Needs Housing Assistance
program for special needs clients.
> The County Special Needs Housing Assistance program should
provide fimds that service providers and special needs individuals
could utilize in the short term:
• For assistance in between housing ch^ges;
• For down payment assistance:
• For emergency rental assistance;
> The County Special Needs Housing Assistance program should
provide service operators and special needs individuals with rental and
housing information Services, including;
• available assistance programs in the County and at the state and
federal levels;
• information on available units for special needs individuals;
• rental readiness training;
• Life skills training.
4) Objective: The County will establish a Special Needs Housing Development
program for issuing permits to build very low and extremely low income housing
. with services. The Special Needs Housing Development program should:
• Issue permits for appropriate Specif Needs Housing projects on Coimty
owned land, or on County unincorporated land;
• Utilize all surplus County lands(or proceeds from the sale of)for the
development ofvery low and extremely low-income housing with services
for special needs individuals and frimilies;
• Become an insurer or guarantor offinancing from public or private
sources for appropriate Special Needs Housing projects;
• Establish a revolving loan fimd that nonprofit developers could utilize to
secure land while additional financing is pursued.
• Establish a rental housing assistance fimd that developers can utilize to
buy down rents and help finance the development ofprojects for special
needs clients.
• Provide "catalyst fin^cing"to assist Special Needs Housing developers at
critical points in the project.
• Leverage "service contracts" to help finance Special Needs Housing
projects.
REGIONAL HOUSING ACTION PLAN SUBCOMMITTEE STRATEGY
RECOMMENDATIONS:
Finance
1.
Coimty should spearhead a Coimty-wide effort to secure a permanent source of
local revenue for affordable housing. The RHAP Committee discussed a myriad of
possible revenue streams and by consensus offers the following as suggested sources:
•Use the County's Redevelopment settlement with the City ofSan Jose.
•Support an increase in the percentage ofredevelopment tax-increment is
directed toward affordable housing(from 20% to 50%)and direct any settlements
with cities toward a Coxmtywide housing pool.
• Create a Countywide sales-tax revenue pool for affordable housing.
•Support legislation that will create Housing Redevelopment zones where
increases in property tax-increment is fimneled toward affordable housing.
While such a revenue source should be used to subsidize development ofhousing along
the continuum ofthe County's housing need,the Committee further recommends that a
portion be directed toward a fimd that can support infiustructure improvements in cities
to incentivize development ofaffordable housing and higher density housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Financial Constraints,
Decreased State/Federal Housing Assistance, Intensification of Use, Lack of
Irfrastructure, Cost ofCity Services/Fiscalization ofLand Use]
2.
The County should spearhead the development ofa local structure to spread tax
allocations County-wide (sales tax revenues on a per-capita basis for example).
[Timeframe: Medium/Long-term; Obstacles Addressed: Financial Constraints, Cost of
City Services/Fiscalization ofLand Use, Housin^JobS Imbalance]
10
3.
The County should help establish a non-profit Imd trust that can purchase
land/use public parcels. Thus,take land acquisition costs out ofthe equation for the
development and preservation ofaffordable housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Speculation, Financial
Constraints]
Regional Leadership/Expanded County Role
1.
The County should establish a Department ofHousing to both consolidate and
ejq)and the County's role in the development ofaffordable housing Countywide.
• To maximize the impact ofenhanced Covmty activity in housing, the County
should establish a County Commission on Housing that would include
representatives from all localjurisdictions. The Commission would not only
oversee the functions ofa Housing Department, it would foster a collective
dialogue on issues ofhousing and provide a vehicle for regional action. Among
the activities such an inter-Govermnental Commission should consider is
educating other elected officials on the importance ofaffordable housing
development in their cities, spearheading regional planning processes that will
mitigate the housing/jobs imbalance, and commenting on the housing elements
ofindividual cities to the State HCD.
[Timeframe: Short-term; Obstacles Addressed: Lack ofa Coordinated Strategy,
Density/Zoning, Lack ofPolitical Will]
2.
The County should take the lead in the development ofaffordable housing on
publicly owned land(County, State, City, VTA -owned parcels, etc.) and Should change
land use policies on the land under its jurisdiction to incentivize the development of
affordable housing and higher density housing. Recognizing this is a dramatic departure
from current practice, the Coimty should lead by example.
[Timeframe:Short/Medium-term; Obstacles Addressed: Growth Controls, Lack ofa
Coordinated Strategy]
^
3.
The Coimty should invest significant resources in a Conamunications Strategy that
will enhance community support for the development ofaffordable housing and greater
public investment in housing as part ofthe infrastructure (press relations, community
outreach, development ofcollaterals that will engage different constituencies in
addressing the housing crisis, etc.).
[Timeframe: Short-term; Obstacles Addressed: Lack ofPolitical Will, NIMBYism]
Other Key Recommendations:
•
In view ofthe fact that rent burden has increased on middle-and low-income
femilies, the County and local cities should study how they can provide rent relief. The
County should take a leadership role in this effort and actively sudvance the
implementation ofthe identified strategies.
[Timeframe: Short-term; Obstacles Addressed: Speculation, Lack ofPolitical Will]
11
•
The County should sponsor a design competition for architects to craft new forms
ofhousing (for example: work with private industry to come up with new types of worker
housing). Awards could include grants, or publishing a book ofgood ideas.
[Timeframe: Short-term; Obstacle Addressed: Limited Varieties ofNew Housing]
•.
Create community processes/structures that will involve local residents and
elected leaders in neighborhood planning efforts to include affordable housing.
[Timeframe: Medium-term; Obstacle Addressed: Intensification ofUse, NIMBYism]
•
The County should support and strengthen efforts to create more living wage
jobs.
[Timeframe:Short/Medium-term; Obstacles Addressed: Housing/Jobs Imbalance,
Speculation]
•
The VTA should purchase land and reuse surplus parcels for housing especially
high density and affordable units.
[Timeframe: Short-term; Obstacles Addressed: Transportation, Lack ofPolitical Will]
Legislation
1.
The Coimty should take a lead role in advocating for reform ofthe property tax
allocation structure created by Proposition 13. The current sy^em is widely perceived to
have created disincentives toward the development ofmore housing by cities.
[Timeframe: Long-term; Obstacles Addressed: Cost ofCity Services/Fiscalization of
Land Use]
2.
The County should take a leadership role in e^anding Federal housing assistance
by rallying community support for the National Housing Trust Legislation and actively
organizing for similar support from other Bay Area communities. Furthermore, the
County should spearhead this effort by preparing an analysis ofexisting federal programs
and how they work or do not work here based on the cost ofhousing and developable
land in our region.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal
Housing Assistance, Financial Constraints, Lack ofPolitical Will]
3.
The County should take a leadership role in expanding State housing assistance
by rallying community support for greater levels offimding for housing and to feirly
condensate regions with higher costs ofliving. In addition to analyzing the efficacy of
Federal programs given the disparate costs here,the County should also prepare an
analysis ofexisting state programs.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal
Housing Assistance, Financial Constraints]
Other Key Recommendations:
•
The County should support statewide legislation that will help enforce Housing
Elements developed by Cities. While consensus was not reached by the RHAP
12
Committee on the form ofsanctions that could be levied against cities, withhold fimding
from cities out ofcompliance was prioritized as a key tool.
[Timeframe: Short-Medium term; Obstacle Addressed: Weak Regulatory Guidelines]
•
The County should take a lead role in a Bay Area-wide lobbying effort for State
legislation correcting problems with Construction Defect Litigation.
[Timeframe:Short-Medium term; Obstacle Addressed: Construction Defect Litigation]
•
The County should help introduce state legislation that will permit CEQA
(California Environmental Quality Act)exemptions for affordable housing development.
[Timeframe:Long-term; Obstacles Addressed: Regulation, Growth Controls],
Zoning/Pianning/Land Use
1.
The County should lead efforts to increase density countywide using a multi-
faceted strategy: Leading by exan^le by creating an affordable housing exen:q)tion to
density limits for homing development; Encouraging our local political leadership ofto
increase density md affordable housing opportunities through planning and zoning policy
discussions and pushing for updates to General Plans; and creating incentives to higher
density /affordable housing development through an infrastructure improvement
conq)onent ofa local housing fimd.
[Timeframe: Medium/Long-term; Obstacles Addressed: Intensification of Use,
Density/Zoning, Growth Controls, Land Use Policy]
2.
The County should lead an effort to create incentives to build housing near transit
(infrastructure inqjrpvements, cheaper financing, etc-)[Timeframe: Medium-term; Obstacles Addressed: Transportation, Density/Zoning,
Growth Controls]
3.
At the Planning Department level: Fast track and prioritize affordable housing
development and encourage cities to the same.
[Timeframe: Short-term; Obstacles Addressed: Regulation]
Other Key Recommendations:
•
The County should support requirements for housing to be developed when any
significant commercial/industrial/retain/office development is proposed. By providing
leadership in a regional dialogue(an inter-govemmental Housing Commission,for
exariple)the County can help introduce such policy tools that may help mitigate the
impact ofrapid job growth and e3q)and the conversation to the responsibilities oflocal
employers to develop^housing.
[Timeframe:.Medium/Long-term; Obstacle Addressed: Housing/Jobs Imbalance]
•
The County should advocate and create incentives for mixed-use development in
infill and new communities(e.g. mid Coyote Valley).
[Timeframe: Medium-term; Obstacle Addressed: Land Use Policy]
13
•
The County should encourage cites to allow/incentivize secondary("granny")
units in existing residential areas
[Timeframe: Medium-term; Obstacles Addressed: Limited Varieties ofNew Housing,
Density/Zoning]
•
The County should create incentives for residential development in nonresidential areas (rezoning).
P'imeframe: Medium/Long-term; Obstacle Addressed: Intensification of Use]
14
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION IV
A VISION
There's no longer any doubt that Santa Clara County is in the midst ofa housing
crisis. Nearly every day, we see or hear yet another gloomy stoiy in the media
about housing shortages and high costs. In the 1980's, we first began hearing about
homelessness, something that had previously occurred during the Great Depression,
or in "other places". But here? In this prosperous place?
After a while, we became inured to the stories. Maybe we told ourselves that
homeless people were alcoholics, drug addicts, or, worse, mentally ill. In any case,
we certainly couldn't solve this complex problem. Not alone. Not without a lot of
money. And, besides, m^ybe "those people" didn't want our help.
Then,in the early 1990's, home prices started sharply escalating much more rapidly
than before. Now it wasn'tjust other people with problems, but our own children.
Home ownership, something we had begun to take for granted, was being priced out
ofreach. Sihcon Valley employees purchased houses in the Central ValleyStockton and Los Banos- and spent more than 4 hours per day commuting to and
fi-om work.
As the '90's progressed, the numbers offamilies - women and children-that found
themselves homeless became the fastest growing part ofthis tragic population. At
the same time, rents began to mirror home resale prices and skyrocketed. The
prices ofapartments rivaled those in Manhatten. Then we heard that people were
"doubling up" in houses-two or three families hving under one roof. We also
began hearing about RV's in company parking lots, housing bus drivers, carpenters,
and police officers.
The latest media stories are about people leaving the Valley in droves-looking for
more affordable housing and less stress in maintaining their lifestyles. It seems that
we have reached this question: how much worse does it have to get before we take
meaningful action? But is the Santa Clara County government the appropriate
organization to respond?
It's almost a secret that the County ofSanta Clara is responsible for housing
thousands ofpeople every day. Whether through development projects built(at
least in part) by the Housing Authority, or funded by sources flowing through the
county; people housed through the Section 8 program or assisted with vouchers
fi-om the Social Services Agency; people in drug and alcohol residential treatment
facilities; mentally disabled people in long-tenn care facilities; people in emergency
shelters and transitional housing units aided by the Collaborative on Housing and
Homelessness, and through contracts with nonprofit service providers; people in the
Health and Hospital system; or those incarcerated in county facilities, a great many
people put their heads on pillows each night at least in part because ofthe efforts of
Santa Clara County.
In fact, Santa Clara Coimty is recognized around the state md the country as an
innovative, effective, and caring provider of housing for its citizens. The Board of
Supervisors has consistently addressed the problem, usually with precious few
dollars or other resources. We have a solid tradition ofthe government, business,
nonprofit, and community sectors already working together. But there is so much
more that the county can do.
\
Better coordination ofexisting efforts would certainly be a good beginning. Perhaps
even some infrastructure re-organization may be in order. But a dire situation
requires bold action.
The problem can seem overwhelming; we may feel as though it CEumot be solved.
Cities often cite infrastructure costs as the reason not to build affordable housing.
The so-called NIMBY(Not In My Back Yard)syndrome drains political will; the
Federal government cuts taxes, and government spending; the state is burdened by
the energy crisis. Each jurisdiction looks to the others to create a solution. But who
is the government, ifnot we?
Housing activists in Washington, D.C., tell us that many on the Federal level are
looking to Silicon Valley for solutions. After all, they say, we have the brainpower
and the money. The recent success ofthe Housing Trust ofSanta Clara County in '
raising $20 million is a testament to our abilities, resources, and concern. In
addition, Santa Clara County is the "arrow head"; the problems have hit here first,
but will soon affect the rest ofthe country.
There are many here in Santa Clara County who^feel that solutions exist, but they
are complex, arid cannot be reduced to "sound bites". Only by working togetherthe county; the cities; school, transportation, and water districts; the State and
Federal governments-can we bring about needed changes in policy, planning, and
finance. But who will take the lead in convening the process? Who will finally say,
enough is enough? We think the time has never been more opportune for an historic
effort that will make Santa Clara County a leader in solving the housing crisis, arid
give Silicon Valley a name in more than technology.
i..
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION V
A CALL TO ACTION
In his State ofthe County Address earlier this year, the Honorable James T. Beall,
Chair ofthe Santa Clara County Board of Supervisors, called for the County to take
bold action in solving the housing crisis. Here is what he said:
Santa Clara County is in the grips ofa housing crisis. With the passage ofproposition
36,the rising number ofspecial needs clients, and the lack ofaffordable housing for
most residents, the time is right for the County to re-evaluate and perhaps redefine its
role in housing. The need has never been greater and the time has never been better
for bold action to significantly address the issue ofaffordable housing.
Supervisor Beall then called for an intensive community planning process to craft a
Housing Action Plan. The broad goal ofthis effort is to identify policy
recommendations for the Board of Supervisors to consider in addressing the housing
crisis.
On May 17, more than 200 community leaders, nonprofit service providers, housing
advocates, members ofthe faith community, and government officials came together
to help create a vision for this important work. A great deal of discussion ensued,
and the Santa Clara County Housing Task Force(SCCHTF)was bom. We
identified five major areas in which we could pursue potential actions and
recommendations, as follows:
• the Regional Blueprint Group, co-chaired by Chris Block and Poncho
Guevarra ofthe Housing Trust ofSanta Clara County;
• the Public Employees Group, co-chaired by Roger Barnes, ofthe Santa
Clara Unified School District and Kristy Sermersheim ofSERJ Local 715;
• the Government Surplus Land Group,co-chaired by Alex Sanchez ofthe
Housing Authority of Santa Clara Coimty, and Bonnie Bamburg of
Community Housing Developers, Inc.;
• the Special Needs Group, co-chaired by WiU Lightboume ofthe Social
Services Agency ofSanta Clara County, and Frank Motta ofthe Corporation
for Supportive Housing; and,
• the Land Trust Group, chaired by Ray ViUareal, the interim Housing
Coordinator for Santa Clara County.
The groups were directed to meet several times over the course ofthe following 90
days, and to develop sets ofrecommendations for short-, mid-, and long-term
objectives that would then be forwarded to the Board of Supervisors for their
consideration.
The following principles were developed as a means to guide the work ofeach
group:
Define the problem/need.
^ Identify and develop strategies using short, medium, and long-term goals.
Consider resources and barriers, especially as they apply to Santa Clara
County.
Objectives must be focused and qujantifiable.
Recognize the County's role in housing production, creation, and
preservation.
Recognize the work ofothers and ifpossible, build upon that.
^ Assign tasks and responsibilities.
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VI
A PROCESS
Paul Wysocki,Project Management Consultant, was engaged to guide the process,
assist with internal and external communication, and ensure that timelines were
respected. The five assigned working groups feU into 2 basic committees: the
Regional Blueprint Group formed the Regional Housing Action Plan(RHAP)
Committee, and generally addressed "Macro" aiid regional planning issues. CoChairs Chris Block and Poncho Guevarra ofthe Housing Trust of Santa Clara
County oversaw this work.
The other four groups-Public Employees, Government Surplus Land, Special
Needs, and Land Trust comprised an overall committee that was more specifically
focused on particular issues. Ray Villareal, Interim Housing Coordinator for Santa
Clara County, staffed these groups. /
Each ofthese subcommittees met several times during the summer. Each oftheni
followed the guiding principles as they developed their own sets of missions,
problem statements, and short-, mid-, and long-term objectives. (Meeting minutes,
group membership, and objectives are all contained in this report).
The subcommittee chairs also met during the summer as the Housing Task Force
Steering Cotnmittee to help guide the unfolding process, as well as to consider how
the objectives would be delivered to the Board of Supervisors. Their separate
objectives are found in the conclusion ofthis teport.
In addition, Wysocki and Chris Block met with the Director ofthe County Planning
Department, Ann Draper, and her staff. The purpose was to discuss the Planning
Department's work on the Housing Element Report, mandated by the state, and how
that report would interact with the Housing Task Force, as well as with the
Supportive Housing Initiative work, convened by Ray Villareal. A memo describing
the work of all three efforts follows in this section.
This report, dated Augi^t 21, 2001, represents the status ofthe work done to date of
the Task Force. While most ofthe objectives have been developed, much work
remains. The RHAP is still engaged in formulating Action Steps for implementation
ofits objectives. In addition, some research remains to be completed. Some ofthe
research topics include:
•
•
•
•
A realistic look at actual need, based upon 2000 census and other data;
County-wide Housing production figures, both historic & projected;
Housing subsidy levels, both historic & projected;
The "elasticity" of housing prices, as affected by supply and demand;
• A look at the "Rent Burdeh" faced by consumers (i.e., the percentage of
gross income allocated to housing costs), especially in light ofthe recent
spikes in rental ratesv
This next phase ofthe process is the Comment Phase. After the Board of
Supervisors has received this report, it will be circulated among elected officials,
business leaders and the community for review. The entire Task Force will meet in
a plenary session on Thursday, September 13 for discussion ofthe overall work. A
briefing session will also be held for elected officials later in September.
Following the Comment Phase, a final report will be delivered to the Board of
Supervisors during a Housing Workshop scheduled for Tuesday, October 16, 2001,
at 1:30 PM.
I
[
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VII
THE FOUR WORK GROUPS
Santa Clara County Housing Task Force
Subcommittee Meeting Schedule
Time:
Government Surpius Land
see Housing Authority Conference Room
3:00 pm - 5:00 pm
Date:
June 21
Subcommittee:
Location:
July 17 ** 3:30 pm - County Building, 7"^ Floor Conference Room
July 26
August 9
Co-Chairs:
Alex Sanchez
Bonnie Bamburg
Subcommittee:
Location:
Special Needs Housing
Time:
1:30 pm -4:30 pm
Date:
June 19
Co-Chairs:
July 11
July 31
August 7
Will LightbOurne
County Building -11*" Floor Conference Room
Frank Motta
Time:
Public/Co. Service Employee Housing Assistance
11*" Floor Conference Room
2:00 pm - 4:00 pm
Date:
June 14
Subcomrnittee:
Location:
July 5
July 19 ** County Building 10*" Floor Conference Room
Co-Chairs:
August 2
August 9
Roger Barnes
Kristy Sermersheim
Time:
Community Land Trust
County Building - Downstairs conference rooms(TBD)
7:00 pm - 9:00 pm
Date:
June 7
Subcommittee:
Location:
June 19
Chair:
July 12 ** 4:00 pm -6:00 pm, Isaac Newton Auditorium
July 24
Ray Villarreal
SANTA CLARA COUNTY HOUSING TASK
FORCE:
COMMUNITY LAND TRUST
Santa Clara County Housing Task Force
Community Land Trust Subcommittee
Final Report
^
August 8, 2001
Phyllis Ward, Affordable Housing Network
Naphtali Knox, Housing Consultant
Mary Reid, Neighborhood Housing Services, Silicon Valley
Staff: Ray Villarreal, SCO Housing Coordinator
Community Land Trust Subcommittee
Final Report
August 8,2001
After consideration of the merits of the various Community Land Trust models, the
Community Land Trust Subcommittee makes the following recommendations.
Short-term Recommendations:
1. Objective: The Subcommittee recommends the Board of Supervisors sponsor
the creation of a countywide,"Affordable Housing Land Bank".
A) The County should immediately assign a small working group to find an appropriate
partner to draw up the Articles of Incorporation, file with the state, draft bylaws,
recruit a Board of Directors etc., and formally establish the "Santa Clara County
Affordable Housing Land Bank"(AHLB).
B) The purpose of the AHLB would be to advance the development of affordable
housing opportunities in Santa Clara County, with special emphasis on low, very
low and extremely low-income housing.
*
C) The AHLB would be charged to accept, hold and administer land, facilities and
funds contributed to the AHLB:
D) The AHLB would be charged to acquire and sell lands for the purpose of giving the
organization the flexibility and means to be effective developing affordable housing
opportunities.
E) The County should make the first contribution of appropriate surplus land to the
AHLB and begin a public campaign to encourage other jurisdictions, corporations,
foundations and private individuals to do the same.
F) The AHLB must establish broad community support for its efforts to develop
affordable housing by establishing partnerships between the County, Cities, for
profit and nonprofit developers, service providers and local philanthropic
organizations.
Mid-term Recommendations:
1. Objective: The AHLB Board of Directors should establish organizational
goals and criteria for the affordable housing projects it will support.
A)
Lands administered by the AHLB would be made available for development
of affordable housing opportunities for low, very low, and extremely low income
populations with emphasis placed on housing opportunities for the following;
A)
1)
Public employees
2)
Non profit service workers
3)
Special Needs Populations
4)
Working Poor Families
The AHLB would support those projects that offered opportunities for
homeownership and rental housing assistance.
1)
Homeownership would be available to those who earn less than
80% of the area median income.
2)
Rental Assistance would be available to those who earn less
than 50% of the area median income.
C)The AHLB would give preference to those projects that promoted the community
interests by adhering to smart growth principles.
D)
The AHLB would establish other goals and criteria as needed.
Long-term Recommendations:
1. Objective: Over the long term,the AHLB must be engaged in an active
campaign of soliciting available lands throughout the county for the
development of affordable housing.
A)
The following jurisdictions and private and nonprofit entities are potential
sources for donated or discounted land that may become available to the AHLB.
1.
Local Governments
a.
Cities
b.
County Agencies
0.
School Districts
d.
Special Tax Districts-VTA, Water District, Sanitation,
Open Space etc.,
1.
State & Federal agencies
2.
Foundations
3.
Nonprofits
4.
Large, local companies
5.
Abandoned,foreclosed, derelict or distressed properties
6.
Private citizens
1. Objective: Over the long term, the AHLB must acquire a source(s) of ongoing
funding for the purpose of buying and administering lands.
A) The following potential sources of funding that may become available to the AHLB.
a.
CDBG & Home Funds
b.
Housing Trust and other Foundations
c.
Other HUD programs
d.
State HCD and CHFA programs
e.
Pension Funds
f.
Lenders Looking for CRA credits
g.
Fannie Mae, Freddie Mac
h.
Local Governments
1)
City Redevelopment,Agencles 20% set aside funds
2)
In-lieu fees from development
3)
Inclusionary zoning assets
4)
passage of a local tax for land acquisition
5)
job creation linkage fees
Community Land Trust Presentation
July 12, 2001
1.
Welcome & Introductions - Paul Wysocki
We have invited two local experts on establishing and running Community
Land trusts in the Bay Area. Both have extensive experience in the North Bay
utilizing the CLT model to produce affordable ownership and rental
Housing in a number of different jurisdictions.
They are:
David Jay Bonn - Executive Director, Northern California Community Land
Trust
Clark A. Blasdell, President and CEO, Suburban Alternatives Land Trust(SALT)
Northbay Family Homes(Based in Novato)
2.
Speaker #1 - David Jay Bonn to speak 20-30 minutes
3.
Speaker #2- Clark Blasdell to speak 20- 30 minutes
4.
Questions & Answers- Ray Villarreal to direct
5.
Wrap up & Thank you - Paul Wysocki
SANTA CLARA COUNTY HOUSING TASK
FORCE:
GOVERNMENT SURPLUS LAND
Santa Clara County Housing Task Force
Government Surplus Land Subcommittee
Final Report
August 9, 2001
Co-Chair-Alex Sanchez,Santa Clara County Housing Authority
Co-ChaIr- Bonnie Bamburg, First Community Housing
Mark Lazzarini,
Bill Arnopp, Silicon Valley Habitat for Humanity
John Moore, ACORN
Mike Eaton, City of San Jose - Housing Department
Chris Bloch, Housing Trust
Heidi Wolf-Reid, SCC Association of Realtors
Betty Feldheym, Interfaith Council
Julie Render, VTA
Mary Hughes,
Margaret Gregg, Santa Clara County Homeless Coordinator
Trish Crowder,,^
Patrick Maben-Hammon, Silicon Valley Manufacturing Group
Andrea Papanasmassiou, Mid Peninsula Housing
Staff: Ray Vlllarreal, SCC Housing Coordinator
Government Surplus Land Subcommittee
Final Report
August 9, 2001
Statement of the Problem
There are many causes for the housing crises in Santa Clara County and unfortunately,
there are not any easy solutions. However, almost universally recognized as the key to
working our way of it; is the availability of accessible, affordable land. Developers of
low income, affordable housing agree that it is their limited ability to buy or control land
that primarily restricts their ability to build.
The subcommittee believes that government at all levels and local public institutions
must rethink their traditional reluctance to use public owned lands for long term
affordable housing in the county. The lack of affordable housing is:
a)
impacting government's ability to recruit and retain public employees
and thereby impacting their ability to deliver effective services;
b)
impacting the long term health and vitality of the local economy
because service workers cannot afford to live here;
c)
straining to the breaking point our overall county housing services
capacity for very low and extremely low income special needs individuals
and families.
We believe it is necessary and appropriate for the County, at this time, to take a
leadership role bringing together local public institutions and jurisdictions to make
government owned surplus land available for the development of affordable housing.
Statement of Purpose
The purpose of the Government Surplus Land Subcommittee is to recommend to the
Board of Supervisors ways and means for County government and other local
jurisdictions to make surplus land available for affordable housing development. To
accomplish this, the Subcommittee focused on: 1) what are the barriers to making
government owned surplus land available for affordable housing; 2) strategies for
overcoming the barriers; and 3) what kinds of surplus lands should be considered for
affordable housing development.
Scope of Work
The Subcommittee agreed that the recommendations put forward in this report are
intended for government at all levels with vacant or surplus land in Santa Clara County,
including public institutions and special tax districts.
For purposes of this report, we
will refer to the above definition as "publicly owned lands."
Mission Statement
It is the mission of this Subcommittee to make short, medium, and long-term
recommendations to the County Board of Supervisors to take a proactive leadership
role in the efforts to make publicly owned surplus lands in Santa Clara County available
for affordable housing development.
Barriers to Utilizing Publiciv Owned Surplus Land for Affordable housing
The Subcommittee identified the following barriers.
A)
The inaccessibility of accurate, updated, complete lists of surplus or
vacant land inventories.
8)
The inability of housing advocates to Influence decision making on
what available government owned lands are deemed surplus.
C)
The inability of housing advocates to influence land use decisions
concerning the disposition of government owned surplus land.
0)
The lack of broad community commitment to use government owned
land for affordable housing.
E)
The lack of political commitment and/or direction by local jurisdictions
to use government owned land for affordable housing.
F)
The lack of a clear, common definition what constitutes publicly owned
surplus land, as well as a process for determining when vacant or under
utilized property becomes "surplus" and therefore available to be used for
affordable housing purposes.
Short-term Recommendations
1. Objective: Develop strategies for overcoming the barriers to using
government owned surplus lands for affordable housing.
A)
The Board of Supervisors should adoptia resolution declaring a "State
of Affordable Housing Emergency" and urging the following actions:
f
1.
The County's intent to use all vacant or surplus lands owned by the
County for the purpose of developing affordable housing;
2.
All local, state and federal jurisdictions including special tax districts in
the county to join with Santa Clara County making their own surplus lands
available for the production of affordable housing;
3.
^
The County will hire a consultant to compile an inventory of all vacant
or surplus land owned by local, state and federal governments in the county,
including special tax districts that also own surplus land in the county;
4.
The County will establish a new process for evaluating and then
declaring which County owned lands are considered surplus or excess land,^
L.
thus, making such lands available for affordable housing development;
5.
The County strongly reaffirms its intention to follow through on its own
stated objectives in the SCC General Plans' Housing Element;
6.
Our state delegation to sponsor legislation requiring local jurisdictions
to include in their Housing Elements a section, describing in detail all vacant
and "surplus lands" owned by the jurisdiction, including their intentions for
future use and timeline. The group would like to see legislation making
Santa Clara County a pilot project.
7.
"Surplus Lands are vacant or under utilized lands or structures that
have not had clearly defined uses the past 5 years and do not have defined
uses over the next 5 years. Surplus lands also include "air rights" where
mixed-use developments are suitable for affordable housing projects".
A)
The County should develop a countywide Affordable Housing
Land Bank, outside of County government,to hold & manage donated
or purchased land for the singular purpose of developing affordable
housing.
1.
The County Land Bank would seek initial funding from local
jurisdictions, RDA's, the Housing Trust and private and philanthropic
sources.
2.
All local jurisdictions and the state would make contributions to the
"County Land Bank" for the single purpose of building permanent affordable
housing developments.
3.
The County Land Bank would also be empowered to purchase
government surplus lands for affordable housing developments.
4.
The Land Bank would also be empowered to purchase private lands or
residential buildings for affordable housing developments or rehabilitation.
5.
The County should require that the Land Bank will work in partnership
with the see Housing Trust, the SCC Housing Authority or a local non-profit
development corporation.
6.
The County should urge jurisdictions to deposit "surplus lands" in the
County Land Bank for a specified period of time. If the surplus lands are not
utilized by the jurisdiction within the specified time, the Land Bank can either
sell the property with the proceeds going towards affordable housing, or
advance the development of the property into affordable housing.
7.
The Land Bank should hold annual public hearings on the disposition
ofjurisdictions surplus lands and there intended usage, filing a report each
year with the Board of Supervisors.
The Committee developed criteria for determining what are the most appropriate
Publicly Owned Surplus Lands for affordable housing. They are as follows:
A)
Access/Availability of existing infrastructure;
B)
Opportunities for mixed use developments;
C)
Partnership opportunities (for land, financing or resources) with other
local jurisdictions and/or private owners;
D)
Consider and address current policies relative to the sale, lease or
gifting of government surplus property;
E)
Consider political issues relative to affordable housing developments;
F)
Analyze cost of on site improvements;
G)
Consider lands that lend themselves to high-density developments a
high priority.
Government Surplus Land Subcommittee
June 7, 2001
Meeting Minutes
Meeting began at 3:10 p.m.
Present:
Co-Chair Alex Sanchez, Co-Chair Bonnie Bamburg, Heidi Wolf-Reid,
Betty Feldheym, Julie Render, Mary Hughes, Bill Arhopp, John Moore,
Margaret Gregg, Irish Crowder, Patrick Maben-Hammon, Mike Eaton,
Andrea Papanasmassiou
Staff:
Ray Villarreal, SCC Housing Coordinator
1.
Purpose of the Committee - Co-Chair, Alex Sanchez opened the meeting by
reading a letter from Supervisor Beali explaining the purpose of the
Subcommittee is to develop specific short and long term strategies which the
County can employ to address the housing crisis of persons with special needs.
2.
Work Pian - The Subcommittee reviewed the work plan to produce a report for
presentation to the full Housing Task Force in September. Those steps include:
a.
Examination of Current County/City- Policies/State Law relative to the
cjischarge of government surplus property
Examination of current programs/reports on utilizing surplus
government land
c.
Search County and other jurisdictions for available inventory
b.
1.
d.
Analyze Inventory and establish parameters/priorities
e.
f.
Quantify potential units
Report to the Board
Guiding Principies-The Subcommittee brainstormed on some guidelines to
assist them as they proceed with this project.
a.
b.
c.
d.
e.
f.
The group must agree on a common definition of "Surplus Property."
The group would like County Counsel to be available to answer
questions and help direct the committee.
The group agreed they must recognize geo-technical limitations of
some government owned property.
The group will look for partnership opportunities between government
surplus property and other jurisdictions and or private owners.
The group should consider mixed uses of government surplus land.
By consensus, the group agreed they could not evaluate all
"government surplus property in the county. The group narrowed its'
evaluation to include surplus property of the County, VTA,SCC Department
of Education and the SCC Water District.
g.
The group will develop a uniform process for evaluating government
surplus, using the above jurisdictions as examples.
1.
Reports/Resources-The Subcommittee will use the following reports and
resources to assist in the project.
a.
b.
c.
d.
1,
Silicon Valley Manufacturing Group - Available Land Survey
City of San Jose Housing Opportunity Study
VTA - Report on transit oriented development
County and Cities Consolidated Plans
Assignments- The following subcommittee members agreed to retrieve the
following materials for consideration at our upcoming meetings.
a.
Lists of Vacant/Surplus properties:
1)
2)
3)
4)
a.
b.
County owned properties- Ray
County Department of Education - Mike Eaton
VTA - Julie Render
Water District- Bonnie Bamburg
County Consolidated Plan - Margaret Gregg
City of San Jose Report on state codes relative to sale or lease of
government land - Mike Eaton.
6.
Meeting Adjourned at 4:30 p.m.
7.
Next Meeting - June 21, 2001 at 3:00 p.m., SCC Housing Authority Conference
Room
Government Surplus Land Subcommittee
June 21, 2001
Meeting Minutes
Meeting began at 3:10 p.m.
Present:
Heidi Wolf-Reid, Betty Feldheym, Bill Arnopp, Margaret Gregg, Irish
Crowder, Mike Eaton, Andrea Papanasmassidu, Chris Bloch
Staff:
Ray Villarreal, SCO Housing Coordinator
1. Review of previous meeting minutes - The Subcommittee reviewed the previous
meeting minutes.
2. Community Land Trust - The Subcommittee discussed the merits of the
Community Land Trust model.
3. Reports- Mike Eaton presented his report of the process the San Jose
Redevelopment Agency must follow in discharging surplus or excess property.
4. Ray Villarreal presented the VTA list of surplus or excess property researched by
Julie Render, of the VTA.
5. Barriers to utilizing government surplus land for housing - The subcommittee
brainstormed on barriers to using surplus government owned land for affordable
housing.
a.
Easy availability of accurate, updated, complete lists of surplus or
vacant land inventories;
b.
Lack of community commitment to use government owned land for
affordable housing;
0.
Lack of political direction by local jurisdictions to use government
owned land for affordable housing;
d.
Lack of a common definition of"Surplus Land".
6. Establishing Countywide policy recommendations on surplus land a.,
The subcommittee discussed strategies to overcoming the barriers to
using government owned surplus lands for affordable housing.
b.
The Board of Supervisors should adopt a resolution to do the
following:
1)
The County shouid declare that all vacant or surplua lands
owned by the Qounty be used for the development of affordable housing
to the extent possible given the size and nature of the land available;
2)
The County should encourage all local jurisdictions and special
tax districts in the
County to join with Santa Clara County in this effort to produce affordable
housing;
3)
The County should hire a consultant to compile an inventory of
all vacant or surplus, local government and special tax district owned
lands in the county;
4)
The County should create a process for evaluating and then
declaring which County owned lands are considered surplus or excess
land, thus, making such lands available for affordable housing
. development;
5)
The County should establish or sponsor a land trust or land
bank outside of County government to hold & manage donated or
purchased land for the purpose of affordable housing development;
6)
The County should consider that the Land Trust work with the
see Housing Trust, or a local noo'-profit development corporation;
7)
The County should strongly reaffirm its intention to follow
through on its own stated objectives in the SCC General Plans' Housing
Element.
6.
Meeting Adjourned at 4:40 p.m.
7.
Next Meeting -July 17,2001 at 3:00 p.m.. Location to be determined.
Government Surplus Land Subcommittee
July 17,2001
Meeting Minutes
Meeting began at 3:45 p.m.
Present;
Heidi Wolf-Reid, Mike Eaton, Betty Feldheym,
Staff:
Ray Villarreal, SCC Housing Coordinator
Nancy Fowler, County General Services Agency
1. Review of previous meeting minutes - The Subcommittee reviewed the previous
meeting minutes.
1. Surplus Government Property Reports
a)
Ray Villarreal presented a GSA report(1998)on surplus property
owned by the County. GSA reported that it currently was working on several
projects having to do with the development of affordable housing, including:
the County Fairgrounds property, Fair Oaks property (Sunnyvale) and
Elmwood property (Milpitas).
b)
A memo provided by Alex Sanchez was provided detailing the efforts
of San Jose in utilizing surplus government property for affordable housing.
c)
Mike Eaton provided a memo from the Affordable Housing Network
detailirig recommendations for the development of affordable housing on
surplus government property.
1. Strategies Discussion
a)
The subcommittee recommended the County consider developing a
countywide Affordable Housing Lands Bank.
1)
All local jurisdictions and the state would make contributions to
the "County Land Bank" for the single purpose of building permanent
affordable housing developments.
2)
The County Land Bank would also be empowered to purchase
government surplus lands for affordable housing developments.
3)
The Bank would also be empowered to purchase private lands
or residential buildings for affordable housing developments or
rehabilitation.
4)
The County Land Bank would seek initial funding from local
jurisdictions, RDA's, the Housing Trust and private and philanthropic
sources.
1. Staff Direction - Staff was directed to organize previous meeting efforts into
consistent strategy groupings discussion at our next meeting July 26, 2001.
2. Meeting Adjourned at 5:15 pm.
3. Next Meeting - Scheduled for July 26, 2001 - 3:00 pm at the Santa Clara County
Housing Authority Conference Room.
Government Surplus Land Subcommittee
July 26, 2001
Meeting Minutes
Meeting began at 3:45 p.m.
Present:
Alex Sanchez, Bonnie Bamburg, John Moore, Mike Eaton, Chris Bloch
Staff:
Ray Villarreal, SCO Housing Coordinator
Paul Wysocki, Project Coordinator
1. Meeting Minutes - The Subcommittee reviewed the previous meeting minutes.
1. Strategy Groupings Discussion A.
Strategy Grouping 1)F). The group emphasized it was critical that
they develop a clear definition of government surplus land, as well as
developing a process for determining when vacant or under utilized property
becomes"surplus" and therefore available to be used for affordable housing
purposes.
B.
Strategy Grouping 2)A)should include the following definition of
Surplus Land:
Surplus Lands are vacant or under utilized lands or structures that have
not had clearly defined uses the past 5 years and do not have defined
uses over the next5 years. Surplus lands also include "air righte x
where mixed-use developments are suitable for affordable housing
projects.
C.
Strategy Grouping 2)A) 1 should include requiring the consultant to
compile all surplus state and federal lands in the County within the scope of
his/her work.
D.
Strategy Grouping 2)A)should include a strategy to lobby our state
delegation for legislation requiring local Jurisdictions to include in their
Housing Elements a section on describing in detail "surplus lands" owned by
the jurisdiction. The group would like to see legislation making Santa Clara
County a pilot project.
E.
Strategy Grouping 2) B). Should require jurisdictions to deposit
"surplus lands" in the County Land Bank for a specified period of time. If the
surplus lands are not utilized by the jurisdiction within the specified time, the
Land Bank carl either sell the property with the proceeds going towards
affordable housing, or advance the development of the property Into
affordable housing.
F.
Strategy Grouping 2) B)should require the Land Bank'to conduct
public hearings on the disposition of jurisdictions surplus lands and there
Intended usage.
1. Issues regarding report writing:
A.
The group discussed and recommends the Housing Task Force
project coordinator hire a professional writer with housing related experience
to work with the HTF,the steering committee and write the report.
B.
The group discussed and racommends the Steering Committee of the
HTF develop recommendations pertaining to the structural Implementation of
the HTF final report.
0.
The group discussed and recommends the final HTF report "dispel the
myths" regarding the County's supposed lack of a role in local affordable
housing development and services.
1. Staff Direction - Staff was directed to Incorporate the above changes Into the
Strategy Groupings working paper for review at the committees next meeting.
2. Meeting Adjourned at 5:15 pm.
3. Next Meeting - Scheduled for August 9, 2001 3:00 pm at the Santa Clara County
Houslrig Authority Conference Room.
SANTA CLARA COUNTY HOUSING TASK
FORCE:
PUBLIC EMPLOYEES HOUSING
ASSISTANCE
Santa Clara County Housing Task Force
Public Employees Housing Assistance Subcommittee
^
Final Report
August 2, 2001
Chair- Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz, Co. Santa Clara, Social Services Agency;
John Tripp, Foundation Trust Mortgage Sepurities;
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Alliance for Community Care;
Chuck Corr, San Jose Unified School District;
Tom Fink, ATU-Local 265
Cyndy Amado, Local 535 Member, SSA
Christine Baucus, ESA Human Resources
Jane Decker, Deputy County Executive
Staff: Ray Villarreal, see Housing Coordinator
Public Employees Housing Assistance Subcommittee
Final Report
August 2, 2001
Statement of the Problem
The housing crisis in Santa Clara County impacts all local public institutions and
jurisdictions severely limiting our ability to recruit and retain high quality public
employees. This greatly affects the quality of services provided by local governments
including critical services like education, public health and safety. We believe it is
necessary and appropriate for the County to take a leadership role bringing together
local public institutions and jurisdictions to address in a meaningful way our common
dilemma.
Statement of Puroose
The purpose of the Public Employees/Contract Service Workers Housing Services
Subcommittee is to recommend ways for the County and other local agencies to recruit
and retain public employees by helping them to solve the housing cost and supply
crisis.
To accomplish this, the Committee is looking at housing assistance as a recruiting and
retention tool and therefore recommends looking at housing assistance as a non-
traditional County supplied service (for public employees only). And^ therefore, not to
be confused with or considered in discussions about housing for homeless, low-income
or special needs clients of the County's traditional services. The problem of recruiting
and retaining public employees begs for a solution of its own.
The intent of the Subcommittee's recommendations is that solutions do not cost the
County, any of its agencies or taxpayers any money in the long run. All funds expended
will be paid back to the originating fund at some time in the future.
Scope of Work
The Subcommittee agreed that the recommendations and proposed services put
fon/vard in this report are intended to be available to all public employees who currently
work in Santa Clara County, as well as employees of community based organizations
that contract with the County and provide health and human services. For purposes of
this report, we will refer to the above definition as "public employees."
Mission Statement
It is the mission of this Subcommittee to make short, medium, and long-term
recommendations to assist the County and other local agencies in recruiting and
retaining high quality public employees by implementing a countywide housing
assistance program for all public employees.
Short Term Recommendations
The following objectives can be achieved in a relatively short period of time and will
give the County the necessary information for crafting a program that meets the needs
of all public employees.
Objective: The County must acquire meaningful data and information regarding
the impact the housing crisis is having on the ability of public jurisdictions and
institutions to recruit and retain public employees.
• The County should collect data on local economic trends, salary levels,
j
turnover rates, job vacancy rates, housing costs, caseloads and
anecdotal information to aid in identifying solutions. ^
• The County should find out what public employees really want or need by
conducting surveys and focus group discussions.
• The County should compare and evaluate information collected with other
similar information collected from other areas.
• The County should seek partnerships with other local jurisdictions and
agencies to contract for the research and evaluation of the problem
Objective:
The County should establish a countywide Housing Education
Assistance Program for all public employees.
• The Program will provide information and educational services regarding:
> Home buying process
> Rental process
> How to take advantage of existing programs
> Using transportation to maximize living decisions
• The program will explore other incentives that jurisdictions are using to
attract and retain quality employees.
• The program should develop a marketing program to inform potential
public employees as to why Santa Clara County is such a great place to
live despite the high cost of housing
• The County should partner with Other interested local agencies for
support and assistance
• The County should develop a countywide Housing Services & Information
web site for public employees to access housing information and
services.
iWedium Term Recommendations
Once a needs assessment is completed and information is evaluated and
organized in a meaningfui way, the County can impiement the foliowing
objectives.
Objective: The County should establish and/or partner with existing organizations in
implementing a countywide Housing Assistance Program for public employees.
• The program wiii provide home purchase financiai assistance inciuding:
> Down payment assistance
> Monthly mortgage payment assistance
> Closing cost assistance
> Service to help home buyers take advantage of all available programs
> Seek support and financial assistance from PERS & STRS
• The program will provide rental assistance including;
> Monthly rental assistance
> Reduced move-in costs -security deposit assistance
> Information service to locate affordable units
> Service to match roommates
> Seek support and financial assistance from PERS & STRS
Objective: The County should convene a countywide Housing Advisory Commission
made up of elected officials and citizens whose purpose would be to develop regional
solutions to the housing crisis. The MAC would be charged to:
• Create partnerships with other groups and jurisdictions that are working to
solve the public employee housing crisis and consolidate efforts at
solving the problem;
• Work with our state and federal delegations and appropriate agencies to
provide tax incentives for public employees who live in high cost areas;
• Work with our state and federal delegations and appropriate agencies to
provide tax incentives for property owners and developers to provide
affordable housing opportunities for public employees;
• Partner with local jurisdictions to effect land use policies that result in
affordable housing units being created;
• Work to change building policies in the county to encourage the formation
of more rental and affordable for-purchase units;
• Work to improve the transportation infrastructure so public employees can
get to and from work easily, no matter where they live;
• Explore the feasibility of building employee housing outside of the county
and then provide efficient transportation specifically for employees;
• Explore the feasibility of increasing the number of manufactured home
parks in the county;
• Develop an ongoing education campaign to build political and community
support for the development of affordable housing.
Long Term Recommendations
Over the long term the County should Implement the following objectives towards the
development of affordable housing options for public employees.
Objective: The County should establish a Housing Department. One of its many
purposes would be to advance the development of affordable housing
opportunities on County surplus land or on unincorporated lands for County
public employees. The County Housing Department would be charged to:
• Acquire existing residential structures and convert them to County
employee housing:
• Explore the availability of housing at Moffett Field;
• Build "transitional housing" or "commute units" for public employees;
• Develop a financing methodology similar to a Credit Union or employee
funded casualty assistance fund;
• Provide incentives for builders to create more affordable housing units
specifically for public employees;
• Encourage building affordable rental or for-purchase housing on County
or local agencies owned land.
I
Objective: The County should develop new resources and/or funding sources for
the purpose of developing affordable housing opportunities.
Potential new
resources or funding could include but not be limited to the following:
Surplus Government Land for building affordable housing units;
Units/Land acquired through Inclusionary Zoning, Density Bonuses;
/
Special Tax districts;
Bond Financing;
Housing development/Commercial development fees;
Local taxes;
Local foundations;
Pension Funds;
Additional state and federal assistance.
Public Employee Housing Assistance Subcommittee
May 31, 2001 Meeting
MINUTES
Meeting began at 2:40 p.m.
Present: , Marcel Pajuelo-Schwartz, County of Santa Clara, Social Services Agency;
John Tripp, Foundation Trust Mortgage Securities;
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Ajliance for Community Care;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Staff:
^
Jane Decker, Deputy County Executive, Acting Chairperson
Ray Villarreal, Housing Coordinator
Leslie Orta, County of Santa Clara, County Counsel
1.
Purpose of the Committee -Acting Chairperson, Jane Decker, opened the
meeting by explaining that the purpose of the Public Employee Housing
Assistance Subcommittee is to develop specific strategies, both short-term and
long-term, that the County could employ to address the housing problems of
public service employees. These strategies or recommendations will be
forwarded to the Board of Supervisors for approval.
2.
Work Plan -The Subcommittee will follow a straightfonA^ard work plan to
produce a report. Those steps include;
Defining the Problem/Need
Definihg the Scope of the Work
identifying Stake Hoidem
identifying short term and long term Strategies to Address:
Resources
Barriers
Examples of what other jurisdictions are doing
identified Products or Outcomes
It was the consensus of the group to meet approximately every 2-3 weeks and
develop a report by August 15, 2001
3.
Defining the Problem/Need -The Subcommittee brainstormed and discussed
symptoms of the housing problems of public employees and the resultant
impacts on employees, institutions and agencies.
The Problem:
The demand for housing in Santa Clara County far exceeds supply
available.
^ The high cost of housing in Santa Clara County, both rental and home
ownership, is an extreme burden for the average public employee.
The Symptoms:
^ More public employees are living further from their jobs and commuting
long hours to get to work.
^ Long commutes for all employees mean less time with their families and
the inability to be involved in their local communities in a meaningful way.
/
Long commutes are stressful for employees. Those public employees in
customer service or other high stress jobs are particularly affected.Moral is low and job performance is affected.
Long commutes for all employees generate severe congestion and smog.
Long commutes for all ernployees hurt the local economy because of the
loss in productivity and revenue.
^ Public agencies are having a difficult time attracting and retaining skilled,
quality employees.
^ Public agencies are experiencing high rates of turnover and losing more
experienced employees. Who also serve as mentors to new
/
V Public agencies are experiencing critical shortages of nurses, teachers,
fire fighters, police officers and other critical service employees.
Public agency's ability to effectively deal with catastrophes is
compromised by shortages and employees living out of the area.
4.
Defining the Scope of Work
The committee agreed that employees of nonprofit agencies, who cpntract
directly with the County to provide critical social services, such as health and
social services, should be included as public employees for purposes of the
Committees' work.
5.
Strategies- A Brainstorming Session - The County should consider the
following:
a. acquiring existing residential structures, i.e., apartments;
b. looking into the availability of using housing at Moffett Field;
c. developing educational material and resources about housing
assistance opportunities for public/CBO employees;
d. developing "transitional housing" or "commute units" for public/CBO
employees;
e. Developing additional transportation services to South County and to
San Benito and Merced Counties;
f. Looking into implementing the Rental Assistance Program of TriCounty Apartment Owners Association;
g. Pursuing additional state legislation supporting public employee
housing;
h. Exploring the feasibility of tax exempt loans for rental down payment
assistance for specific employee groups;
i. Exploring the feasibility of home ownership, down payment assistance
programs in Santa Clara County for public employees:
1. City of San Jose, Homebuyer Program for Teachers
2. Silicon Valley Neighborhood Services Program
3. Shared Equity Program - in Santa Clara Unified School District
j. Developing a Count^ide Housing Web Site that makes provides
information on available affordable housing projects/units,
products/assistance, and services.
6.
Next Steps - The Committee didn't finish the May 31 agenda, so will continue
working on the pieces of the workplan on June 14.
7.
Next Meeting - The Committee will meet again on June 14, 2001 at 2:00 p.m.,
11"^ Floor Conference Rooms 1 & 2.
Meeting Adjourned at 4:30 p.m.
Public Emplbyee/Contract Service Employee
Housing Assistance Subcommittee
July 5,2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz, County of Santa Clara, Social Services Agency;
Jane Decker, Deputy County Executive, Acting Chairperson
Staff:
^
Ray Villarreal, Housing Coordinator
1. Review of Minutes from 6/14 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Mission Statement- By consensus the subcommittee directed staff to draft a
Mission Statement for consideration and approval at their next meeting.
"The housing crisis in Santa Clara County impacts all local public institutions and
jurisdictions severely limiting our ability to recruit and retain high quality public
employees. This greatly affects the quality of services provided by local governments
including critical services like public health, safety and education. We believe it is
necessary and appropriate for the County to take a leadership role bringing together
local public institutions and jurisdictions to address in a meaningful way our common
dilemma."
"It is the mission of this Subcommittee to forward recommendations to the SCO
Board of Supervisors implementing Countywide housing assistance programs
and polices designed specifically to recruit and retain high quality public
employees and contract service employees throughout Santa Clara County".
3. Developing Recommendations- The subcommittee began sifting through
strategies and ideas developed in previous brainstorming sessions and organizing
them into clear recommendations with short term and long term focus.
^ Recommendation #1 -Short term: The County should coordinate a
countywide Housing Services Education Program for all public employees
and contract service employees in the county.
a. The County should seek the support from all local institutions and
jurisdictions;
b. The County should seek support from California PERS and STERS;
c. Housing Services Education should include information and training in
rental assistance programs and services and homebuyer assistance
and services available throughout the county;
d. The County should develop a Housing Services web site that provides
information on rental and affordable housing programs and
assistance;
e. The County should seek the collaboration and support from all local
nonprofits that are providing these services.
^
Recommendation #2- mid-long term: The County, in partnership with
other local jurisdictions, should explore the feasibility of establishing
countywide housing assistance programs for public/contract service
employees.
1) Possible homeownership programs
a) Down payment assistance
b) Monthly mortgage assistance
c) Credit enhancement
d) Closing costs assistance
e) Below Market Rate Housing Development
f) Higher qualifying ratios
2) Rental Assistance programs
a) Security Deposit Guarantee
b) Credit Enhancements
c) Below Market Rate Developments
^
Recommendation #3- mid-long term: The County should explore the
feasibility of lobbying for the creation of state and federal tax incentives to
induce property owners and developers to provide below market rate
housing.
^
Recommendation #4- mid-long term; The County should explore other
incentives to require property owners, developers and businesses to provide
below market rate housing:
1) Inclusionary zoning and other land use incentives
2) Commercial development fees
1.
Direction to Staff- Staff was directed to organize information into consistent
groupings for development into focused recommendations at our next meeting.
2.
Next Meeting -The next meeting of the Subcommittee will be July 19, 2001 at
the County Building in the 7'^ Floor conference room.
Meeting Adjourned at 4:15 p.m.
Public Employee Housing Assistance Subcommittee
June 14, 2001 Meeting
MINUTES
\
Meeting began at 2:35 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Mary Reed, Neighborhood Housing Services, Silicon Valley;
Gene Longinetti, Fremont Union High School District;
Linda Latasa, Los Gatos Union School District;
Dennis Mills, Alliance for Community Care;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Tom Fink, ATU-Local 265
Cyndy Amado, Local 535 Member, SSA
Christine Baucus, ESA Human Resources
Staff:
Jane Decker, Deputy County Executive, Acting Chairperson
Ray Villarreal, Housing Coordinator
1. Jntroduction of Chair-Acting Chairperson, Jane Decker, opened the meeting by
announcing Roger Barnes had agreed to chair the Subcommittee.
2. Review Minutes - Chairman Barnes reviewed the minutes and actions taken from
the previous Subcommittee meeting.
3. Subcommittee Experience/Resources: The subcommittee discussed the various
resources and experience members can bring to the table to employ on behalf of the
subcommittee's efforts.
• Teacher Monthly Mortgage Assistance Program -Fremont Union High School
District;
• Teacher Down Payment Assistance Program-Fremont Union High School District;
• Experience in forming partnerships with cities (Cupertino, Sunnyvale, San Jose)•
•
•
•
San Jose Unified School District;
Neighborhood Housing Services Silicon Valley
City of San Jose - Teacher Homebuyer Program
City of San Jose - Considering city employee housing assistance
ATU Local 265- working with VTA to provide employee rental payment assistance
4. Stakeholders - The Subcommittee brainstormed and identified key stakeholders,
ihcluding those that would benefit from housing assistance and those that have
resources to provide.
Beneficiaries:
^ Public Employees;
Nonprofit employees contracted with County to provide health and
human services;
^ All Local Governments- benefit by keeping aiid recruiting quality
employees
^ Recipients of nonprofit services
^ Development Community
Resource Providers- Land & Financing:
^ Local Governments
♦ Higher Densities
♦ Mixed Use
♦ Inclusionary Zoning -Set aside affordable units for public erhployees
♦ Research 6upertino Inclusionary Zoning Ordinance (Corr)
♦ Create Special Tax(s) District for Housing
♦ Tax commercial/industrial developments to be used for affordable
housing projects -"Deal with jobs/housing imbalance"
School Districts - provide bond financing and surplus land
^ State Agencies- provide bonds, homeownership programs, development
funds
■/
^
^
^
Special Tax Districts (i.e., VTA, Water District, Sanitation District etc.,)
Developers
Federal Government - HUD, Fannie Mae Programs
Pension Funds - PERS, STERS
Taxpayers
^ Housing Trust
Foundations
5. Determining Needs - The subcommittee determined the greatest needs of the
County are: ^
•
Available Land
•
•
•
•
•
Financing
Information campaign to mitigate "NIMBYism" and educate public on affordable
housing benefits
Cooperation between agencies
Adequate services to support housing development
Legal clarification of Fair Housing Laws
•
DATA - including local economic studies, salary levels, turnover rates, vacancy
rates, housing costs, caseloads, anecdotal information
•
Define what public employees really want and need - (City of Sunnyvale did a
survey of their employees)
6. Next Meeting
• July 5, 2001 at County Building
• The subcommittee determined their future meetings to be as follows: July 5, July
19, August 2, August 9(if needed)
Meeting Adjourned at 4:15 p.m.
Public Employee/Contract Service Employee
Housing Assistance Subcommittee
July 19,2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Gene Lpnginetti, Fremont Union High School District;
Chuck Corr, San Jose Unified School District;
Roger Barnes, Santa Clara Unified School District
Dennis Mill, Alliance for Community Care
Paul Wysocki, Overall Project Coordinator
Staff:
Ray Villarreal, Housing Coordinator
1. Review of Minutes from 7/05 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Message from Project Coordinator- Overall project coordinator Paul Wysocki
spoke to the subcommittee and discussed the project status, the status of the other
subcommittees and a timeline for future developments.
3- Mission Statement-By consensus the subcommittee approved the attached
Statement of Purpose and Mission Statement for inclusion in their final report
4. Review of Strategy Groupings- The subcommittee reviewed and discussed
strategy groupings as developed by staff from previous subcommittee discussions and
brainstorming sessions. Committee members will forward any additional thoughts, or
new ideas on the strategy groups for inclusion in the final draft to be presented to the
subcommittee at the August 2, 2001 meeting.
5. Next Meeting -The next meeting of the Subcommittee will be August 2, 2001 at
2:00 pm in the County Building in the 11''^ Floor conference room.
6. Meeting Adjourned at 4:05 p.m.
Public Employee/Contract Service Employee
Housing Assistance Subcommittee
August 2, 2001 Meeting
MINUTES
Meeting began at 2:15 p.m.
Present:
Mike Eaton, City of San Jose Housing;
Gene LonglnettI, Fremont Union High School District;
Chuck Corr, San Jpse Uniflecl School District;
Roger Barnes, Santa Clara Unified School District
Marcel Pajuelo-Schwartz
Jane Decker, Deputy County Executive
Staff:
Ray Vlllarreal, Housing Coordinator
1. Review of Minutes from 7/19/01 Meeting - Chairperson Roger Barnes opened the
meeting by reviewing the minutes and actions taken from the previous Subcommittee
meeting.
2. Review of Strategy Groupings- The subcommittee reviewed and discussed
strategy groupings as developed by staff from previous subcommittee discussions and
brainstorming sessions. Committee members approved the attached report for
presentation to the Housing Task Force.
3. Next Meeting - None scheduled at this time.
4. Meeting Adjourned at 4:05 p.m.
SANTA CLARA COUNTY HOUSING TASK
FORCE;
SPECIAL NEEDS HOUSING
Santa Clara County Housing Task Force
Special Needs Housing Subcommittee
Final Report
August?, 2001
Co-Chair-Will Lightbourne, Santa Clara County Social Services Agency
Co-Chair- Frank Motta, Corporation for Supportive Housing
Sheri Burns, Silicon Valley Independent Living Center
(
Barbara Serna
Consuelo Collard, Santa Clara County Social Services Agency
Diana Kalcic, Santa Clara County Social Services Agency
Bob Campbell, Project Match
Sharon Miller, St. Josephs Cathedral
Mike Weinstein
Jeffrey Hare, Attorney at Law
Sharon Rea, Santa Clara County Public Guardians Office
Edith Sona, Santa Clara County Department of Drugs and Alcohol
Dennis Mills, Alliance for Community Care
Yolanda Engiles, Christian Housing Alliance Ministry
Izi Chan, Santa Clara County Foster Care Service
Kristie Kesel, Housing For Independent People
Denise Scovel, Innvision
Melina Jovanovic, Immigrant Action Network
Lisa Merlin,
Corky Gutierrez, Santa Clara County Mental Health Department
Sandy Perry, Christian Housing Alliance Ministry
Rebecca Elliot, Innvision
Bonnie Bamburg, First Community Housing
Mark'Lazzarini
Dan Wu, Catholic Charities
Sandy Decker, Los Gatos City Council
Rex Painter, American Red Cross
Staff: Ray Viliarreal, SCC Housing Coordinator
Special Needs Housing Subcommittee
Final Report
August 7, 2001
Problem Statement
Santa Clara County Is In the midst of a severe housing crisis of unprecedented
proportions. The housing shortage and consequent high cost of housing affect all of
us, but those particularly vulnerable are the very low and extremely low-income special
needs populations, most of whom are served by County agencies.
"The housing problems faced by special needs populations are complex. Many inter
related factors contribute to the crisis including; a lack of resources at the Federal and
State levels, a lack of coordination between jurisdictipns, developers and service
providers, restrictive and sometimes contradictory regulatory requirements, and of
course political considerations("NIMBYism"). Costly to build and provide services for,
a
and politically difficult to rally around; low income housing for special needs individuals
and families is a difficult burden for any single jurisdiction or agency to tackle."
The latest^housing cycle has exacerbated the crisis, driving rents literally beyond the
means of special needs individuals and families living on meager or fixed incomes.
Worse still, the high cost of housing, even substandard housing, is beyond the abilities
of the County and service providers to make up the housing cost shortfall in assistance.
Service providers, shelter operators and County housing staff report that overall
countywide housing service capacity is dwarfed by the ovenA/helming demand. The
convergence of rising housing costs, declining inventory and overwhelming demand
has given rise to the dilemma of escalating impoverishment and homelessness of
special needs persons and rising costs of providing necessary housing and social
services.
The County, however, through the efforts of the Housing Task Force is now in a unique
position to take a leadership role and bring together local jurisdictions, developers, and
service providers throughout the county to address the housing crisis in unified and
meaningful way.
Statement of Purpose
The purpose of the Special Needs Housing Subcommittee is to recommend ways for
County government to take a proactive, leadership role in the community, supporting
/
and advocating for the development of very low and extremely low-income housing
combined with appropriate services for special needs populations.
Scope of Work
The Subcommittee agreed that the recommendations and proposed services put
forward in this report are intended for all special needs individuals and families living in
Santa Clara County as identified by the subcommittee (See Attachment 1).
Mission Statement
The Subcommittee envisions County government providing the necessary political
leadership and resources to ensure adequate housing and services for special needs
individuals and families is available throughout the county. The Subcommittee believes
it is the County's role to advocate that special needs individuals and families can live
productive, successful lives when permanent affordable housing with appropriate on
going services are available.
Short Term Recommendations:
1) Objective: The County will take a proactive, local leadership role becoming the
primary advocate for developing very low and extremely low-income housing
throughout the county for special needs clients. The County should:
> Become a facilitator of developments for special needs housing by bringing together
county resources, cities, developers and service providers;
> Work towards changing local land use policies to include more special needs
housing components;
> Advocate linking local land use approvals and funding assistance with tradeoffs
benefiting affordable housing developments with appropriate services for special
needs populations;
> Advocate attaching to core business functions of the local economy (in lieu fees,
exaction's, etc.,) the financing of affordable housing and/or housing services for
special needs populations;
> Advocate that all government surplus lands (or proceeds from the sale of) be
dedicated to the development of very low and extremely low-income housing;
> Provide resource development and grant writing assistance to County agencies and
housing and service providers to facilitate the development of more low-income
housing;
> Work to ensure Community Development Block Grant funds are allocated to meet
County low-income housing objectives;
> Evaluate potential revenue sources that could be used for the development of more
low-income housing and explore ways to establish a permanent source of funding.
1) Objective: The County will take a proactive leadership role at the state and
federal levels of government for developing very low and extremely lowincome housing throughout the county for special needs clients.
> Advocate for more resources and incentives in high cost areas to encourage the
development of very low and extremely low-income housing;
> Work with various local funding sources, as well as state and federal agencies on
developing flexible conditions and requirements on the use of funds for Special
Needs Housing;
> Work with various local funding sources, as well as state and federal agencies on
developing consistent reporting requirements on the use offunds for Special Needs
Housing;
> Request our state delegation to lead a large-scale effort to review and refbrm state
licensing requirements and code.
1) Objective: The Board of Supervisors will create within County government an
Affordable Housing Unit td coordinate and support new and existing County housing
service efforts, acquire new resources, gather and manage housing data and insure
all departments are working together using resources efficiently. The County
should:
>: Task the housing unit to coordinate the special needs housing efforts
undertaken by the separate agencies and departments;
> Develop the means for acquiring and managing critical data relative to the
housing needs of special needs populations throughout Santa Clara County;
> Develop a standardized Intake systern among County agencies to better
determine the housing needs of County clients and facilitate effective housing
placement;
> Support the development and dissemination of an Information data base on
available units or beds for special needs Individuals;
> Make County housing information easily available to the service operators,
developers to assist them in acquiring funding;
> Make County information available to cities and the community at large to
demonstrate the severity of the problems faced by special needs populations.
Mid-term Recommendations:
1) Objective: The County^and Cities wiii estabiish a countywide Housing
Advisory Commission(MAC)as a regional forum for discussing and acting on
the entire spectrum of housing issues. The HAC should:
> Establish countywide inter-jurisdictional housing agreements for the creation of
special needs housing development and/or services;
> Establish inter-County relationships relative to special needs housing and services
issues;
> Establish a countywide Land Bank, comprised of surplus land and financial
contributions of all local jurisdictions, to be administered by the HAC or other non
profit agency,for the single purpose of building and rehabilitating low, very low and
extremely low income housing;
> Work with cities on siting appropriate special needs housing projects on surplus
government owned lands, or on County unincorporated land;
> Work with cities on expediting development of special needs housing projects by
seeking waivers or variances on LAFCO rules, transportation services rules, density
rules etc.;
> Develop countywide housing goals for special needs populations based on needs
assessments and inventory data, and advocate for regional support to meet those
goals;
> Develop a countywide Housing Action Plan to comprehensively address the housing
needs of all Santa Clara County residents, and enlist regional support for the
implementation of this plan.
1) Objective: The County will seek "best practices" in Special Needs Housing
management.
> To insure County agencies and clients are getting the best housing services
possible, the County should explore ways to encourage and reward successful
programs.
> The County should explore different community based special needs housing
models to find innovative designs that would be effective in Santa Clara County.
Long Term Recommendations:
1) Objective: The County will establish a Special Needs Housing Assistance
program for special needs clients.
> The County Special Needs Housing Assistance program should provide funds that
service providers and special needs individuals could utilize in the short term:
a) For assistance in between housing changes;
b) For down payment assistance:
c) For emergency rental assistance;
/
> The County Special Needs Housing Assistance program should provide service
operators and special needs individuals with rental and housing information
services, including;
a)
available assistance programs in the County and at the state and
federal levels;
b)
information on available units for special needs individuals;
c)
rental readiness training;
d)
Life skills training.
1) Objective: The County will establish a Special Needs Housing Development
program for issuing permits to build very low and extremely low income
housing with services. The Special Needs Housing Development program
should:
> Issue permits for appropriate Special Needs Housing projects on County owned
land, or on County unincorporated land;
;
> Utilize all surplus County lands (or proceeds from the sale of)for the development
of very low and extremely low-income housing with services for special needs
individuals and families;
> Become an insurer or guarantor of financing from public or private sources for
appropriate Special Needs Housing projects;
> Establish a revolving loan fund that nonprofit developers could utilize to secure land
while additional financing is pursued.
> Establish a rental housing assistance fund that developers can utilize to buy down
rents and help finance the development of projects for special needs clients.
> Provide "catalyst financing" to assist Special Needs Housing developers at critical
points in the project.
y Leverage "service contracts" to help finance Special Needs Housing projects.
Special Needs Housing Subcommittee
June 6, 2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Sheri Burns, Barbara
Serna, Consuelo Collard, Diana Kalcic, Bob Campbell, Sharon Miller,
Mike Weinstein, Jeffrey Hare, Sharon Rea, Edith Sona, Dennis Mills,
Yolanda Engiles, Izi Chan, Kristie Kesel,
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Purpose of the Committee - Co-Chair, Will Lightbourne opened the meeting by
reading a letter from Supervisor Beall explaining the purpose of the Special Needs
Housing Subcommittee is to develop specific short and long term strategies which the
County can employ to address the housing crisis of persons with special needs.
2. Work Plan - The Subcommittee reviewed a straightforward work plan to produce a
report for presentation to the full Housing Task Force in September. Those steps
include:
Defining the Problem
a. Conducting a preliminary heeds assessment
b. Identifying and examining barriers to providing special needs housing
c. Reviewing current reports, or examples of what other jurisdictions are
doing
d. Determining short term and long term strategies/recommendations
e. Producing a final Report
3. Special Needs Populations Defined - The Subcommittee brainstormed on who
comprise special needs populations and their problems (Please see attachment for
list).
4. Defining the Need - The Subcommittee next addressed the housing needs of the
special needs populations.
a. There is a need to "decongest" the system. How do we make the
system flow?
b. There is a need for more special needs housing:
1) low income housing - client pays full rents
2) permanent subsidized housing - partial rents
3) permanent supportive housing
c. There is a need for the County to better manage and direct its
resources towards special needs housing.
d. There is a heed for better and focused data on the scope of the
problems faced by the speclal needs populations.
e. There is a need for better and focused advocacy at the federal and
state level, as well as locally.
f. There is a need for iand to build special needs housing.
g. Special Needs Housing development must be sensitive to the unique
needs of different special needs populations.
5. Strategies - The Subcommittee discussed strategies for addressing identified
needs.
a. The County should make ^its' surplus land (or proceeds from the sale)
available to nonprofit developers to develop low income housing,
including special needs housing with services, if County resources
are being used there is an obligation that special needs housing be
given 1®! priority.
b. The County should deveiop a system for acquiring, managing and
making available special needs populations' data, as weli as special
needs housing data. The County could become a "Clearinghouse"
and disseminator of vital data.
c. The County should consider requesting our state delegation to get
behind a large-scale effort to review and reform state licensing
requirements and code.
1) Are licensing issues getting in the way of providing additional
housing opportunities?
2) Is there a better model, a rational standard for licensing?
d. The County should take a local leadership role, advocating for special
needs housing.
6. Additional Resources to Consider -The Subcommittee agreed to consider the
foilowing resources for additional ideas:
a. SJ Mayors Task Force on Homelessness
b. Housing Choices - Report on Developmentally Disabled Needs in
see
c. Corporation for Supportive Housing - analysis of costs of housing
special needs persons vs. housing in an institutional setting
d. see Supportive Housing Initiative
7. Additional Participants - The Subcommittee requested staff to invite local
nonprofit developers to attend next meeting for discussions regarding special
needs housing deveiopment.
8. Next Meeting -June 19,2001 at 1:30 p.m., 11®^ Floor Conference Room.
9. Meeting Adjourned at 4:00 p.m.
Special Needs Housing Subcommittee
June 19, 2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Consuelo Collard,
Diana Kalcic, Bob Campbell, Edith Sona, Dennis Mills, Kristie Kesel,
Denise Scovel, Melina Jovanovic, Lisa Merlin, Corky Gutierrez
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Review June 6**' Minutes- The meeting opened with a review and discussion of
the June 6'^ minutes. Discussion ensued over the definition of special needs housing
types.
a. Special Needs Housing was defined as the following;
1) safe and stable over the long term;
2) with options ranging from independent living to some connectivity to
services;
3) Affordable to those eaming less than 30% of area median income.
b. Key issues relative to Special Needs Housing were identified as:
1) Broad and diverse populations with varying needs;
2) Broad and diverse housing types are needed to accommodate the
populations including funds to keep what housing is available affordable.
f
2. Barriers to Providing Special Needs Housing - The Subcommittee brainstormed
on what barriers exist to providing additional special needs housing.
a. Land
b.
c.
d.
e.
f.
g.
h.
i.
j.
Financing
Means to retain affordable housing for special needs populations
Lack of coordination between County agencies
,
Lack of coordination between Service providers and County agencies
Lack of commitment by County to increase affordable housing options for
special needs populations
Lack of coordination/communication between cities and counties
Lack of coordination/communication between service providers and
developers
Lack of community support-NIMBYism
Lack of state/federal and County communication and coordination
k. Formulaic bias at the State and Federal levels of funds distribution
I. Projects in SCC require a variety of funding sources and each has
conditions that may or may not be compatible
m. Lack of readiness of typical SNH clients
n. Language and cultural barriers to providing services to all in need
0. Perception of "Silicon Valley" as the "Land of Only the Wealthy"
p. Lack of ownership and commitment by the community to solve the housing
crisis
q. Lack of public campaign to promote the benefits of special needs housing in
the cities
r. Lack of cooperation between service providers
s. Lack of Section 8 Vouchers
3. Strategies - The Subcommittee continued its'discussion of strategies for
addressing identified needs and barriers from the previous meeting.
a. "Since we can't do it on public funding alone, we must attach financing of
affordable housing and/or housing services for special needs populations to
core business functions of the local economy."
b. The County and Cities should establish countywide inter-jurisdictional
housing agreements for the creation of special needs housing development
and/or services.
c. The County and Cities should establish a Countywide Housing Advisory
Commission as a regional forum for discussing and acting on entire spectrum
of housing issues
d. The County should establish inter-County relationships relative to special
needs housing issues.
e. The County should take a leading role, bringing together cities, developers
and service providers, facilitating land use decisions that include special
needs housing components."We must link local, public approvals of land use
with tradeoffs benefiting affordable housing development and/or services for
special needs populations".
f. The County should establish a rental/housing assistance fund that service
providers can utilize in the short term to assist disabled or semi-disabled
persons in between housing changes. Over the long term the funds would be
utilized to "gap" finance housing services of special needs individuals^
4. Next Meeting - The Subcommittee requested staff to invite local nonprofit
developers to attend next meeting for discussions regarding special needs housing
development.
^
^
5. Next Meeting - July 11, 2001 at 1;30 p.m., 1
'
Floor Conference Room.
6. Meeting Adjourned at 4:20 p.m.
Special Needs Housing Subcommittee
■
July 11,2001
Meeting Minutes
Meeting began at 1:40 p.m.
Present:
Co-Chair Will Lightbourne, Co-Chair Frank Motta, Bob Campbell, Edith
Sona, Kristie Kesel, Lisa Merlin, Corky Gutierrez, Jeffrey Hare, Yolanda
Engiles, Izi Chan, Rebecca Elliot, Bonnie Bamburig, Mark Lazzarini, Dan
Wu,Sandy Decker, Sandy Perry, Sharon Miller,
Staff:
Ray Villarreal, SCC Housing Coordinator
1. Review June 19® Minutes - The meeting opened with a review and discussion of
the June 19® minutes.
2. Barriers to Providing Speciai Needs Housing -The Subcommittee had an open
ended question and answer session with several representatives from nonprofit
housing development corporations.
identified Barriers to deveiopment:
a. Finding available, suitable (near services) land and beihg able to pull
together financing quickly enough to purchase it.
b. Subsidies for Special Needs Housing are significant and require weaving
together multiple funding sources from multiple agencies with multiple
conditions and requirements on how those funds can and cannot be used.
Often times those requirements are at odds or contradictory.
c. Permitting process and requirements is difficult for SNH developers to
comply with.
d. Politically difficult for cities to deflect NIMBY pressures and justify exorbitant
subsidies required for developing very low and extremely low-income
housing.
Identified Strategies
a. The County should consider the feasibility of issuing permits for appropriate
Special Needs Housing projects oh County owned land, or on County
unincorporated land.
b. The County should partner with and work with cities on siting appropriate
Special Needs Housing projects on County/City owned lands, or on County
unincorporated land.
c. The County should partner with and work with cities on expediting
development of Special Needs Housing projects(on County/City owned land,
or on County unincorporated land) by seeking waivers or variances on
LAFCO rules, transportation services rules, density rules etc.
d. The County should work with various funding sources, including state and
federal agencies on developing flexible conditions and requirements on the
use of funds for Special Needs Housing.
The County should work with various funding sources, including state and
federal agencies on developing consistent reporting requirements on the use
of funds for Speciai Needs Housing.
f. The County should consider the feasibility of becoming an insurer or
guarantor of financing from public or private sources for appropriate Special
Needs Housing projects.
g. The County should establish a rental housing assistance fund that service
providers can utilize for down payment assistance and developers can utilize
to buy down rents and help firiance the development of projects for special
needs clients.
h. The County should explore the feasibility of providing "catalyst financing" to
assist Special Needs Housing developers at critical points in the project.
i. The County should consider leveraging "service contracts" to help finance
Special Needs Housing projects.
Identified County Role
a. The County should become a recognized, proactive force countywide for
Special Needs Housing development, directing surplus lands, resources and
funds to the extent possible towards Special Needs Housing development.
b. The County should empower the Housing Coordinator to facilitate Special
Needs Housing development partnerships between the County, cities,
developers, service providers and funding sources, always pushing the
development process forward to completion.
c. The role of the Housing Coordinator is as follows;
1) To serve as the County advocate for special needs housing;
2) To establish partnerships with cities, nonprofit developers, service
providers and funding sources;
3) To manipulate resources and funding for the development of special
needs housing;
4) To utilize appropriate rneans available to preserve existing Special
Needs Housing.
d. The County should establish a Countywide Housing Advisory Commission to
work with the Housing Coordinator to develop quantifiable development
goals.
3. Review of Existing Reports- The Subcommittee reviewed the
"Recommendations" section of the Supportive Housing Initiative. It was the consensus
of the group to support the recommendations without further comment.
4. Staff Direction - The subcommittee directed staff to organize the information
developed from the brainstorming sessions into consistent groupings around comrhon
objectives.
This draft will be reviewed arKi reworked by the subcommittee at our ndxt meeting and
form the basis for the Subcommittee's report to the Housing Task Force.
6. Next Meeting - July 31, 2001 at 1:30 p.m., 11*^ Floor Conference Room.
'
\
6. Meeting Adjourned at 4:20 p.m.
Attachment #1
Special Needs Housing Subcommittee
Definition of Special Needs Population
a. Homeless indivicluals and families
b. Elderly including;
1) physically and financially abused
2) mentally ill
3) frail and disabled
4) homeless
c. Abuse Victims
1) children
2) adults, families
d. Mentally III persons
1) adults
2) families with children
e. Developmentally Disabled
f. Physically Disabled
1) Victims of Traumatic Brajn/Spinal Injury
2) Other physical disabilities and/or injuries
g. Persons with Health Disabilities
1) Persons with HIV/AIDS
2) Victims of Organic Brain Syndrome (dementia, alzheirrier's)
3) Other health or medical related disabilities and/or injuries
h. Foster Care families
1) foster parents
2) Families/relatives trying to reunify with children
3) Aged out foster care young adults
i.
Criminal Justice clients
j. state Hospital clients
k. Substance Abusers
I.
CalWorks clients
m. Persons with Extremely Low Incomes(ELI) living at or below the
federal poverty level.
SANTA CLARA COUNTY HOUSING TASK FORCE:
SECTION VIII
REGIONAL HOUSING ACTION PLAN COMMITTEE
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Summary Report
Wednesday, May 30 & Friday, June 1,2001
Participants: [5/301: Alyson L. Abramowitz, Chris Block,Bob Brownstein, Candy Capogrossi,
Tracey Chew, Steve Glickman,Poncho Guevara, Art Henriques, Bill McWood,Dunia Noel,
Christy Paul, Maria Romero-Aranda, Paul Stewart, Ray VilWreal, Gertrude Welch, Billie & Saul
Wachter, Heidi Wolf-Reid. [6/1]: Chris Block, Larry Boales, Bob Dougherty, Poncho Guevara,
Ron Johnson, Kevin Malone, John Ordonez, Louie Rocha, Ben Spero, Greg Tomkins.
Goals of Countv Housing Task Force:
• Craft a Comprehensive Countywide Plan to determine what the needs are, what new
resources are necessary,^d how these resources can be identified, generated, and obtaii^.
• Identify existing initiatives underway in the region
• Recognize and integrate the current housing activities ofCounty Departments as well as those
ofthe Housing Trust and the County Executive's Office.
• Components will focus on the housing needs oflow-income, special needs populations and
County workforce.
• Consider the creation ofan Alfordable Housing Land Trust.
• Identify surplus Coimty property for affordable housing development.
Guiding Pripciples for the Countv Housing Task Force;
•
•
•
•
Define the problem/need
Identify and develop strategies using short, medium, and long-term goals
Consider resources and barriers, especially as they apply to Santa Clara County
Objectives must be focused and quantifiable
• Recognize the County's role in housing production, creation, and preservation
• Recognize the work ofothers and build upon that
Role of the Regional Housing Action Plan Committee: Committee members identified how we
define successfrom this process
• Define and recommend a Countywide, comprehensive action plan to be presented to the
County for ratification
• Define a bold visionfor housing that looks at housing issue in all ofits complexity that is
tenqjered, but not limited, by what we perceive we can accomplish.
• The plan will be Justified based on a defensible analysis ofneed and resources
• The plan will include clearly defined strategies(short, intermediate and long-term) and who is
responsible for implementii^ each strategy.
V ■ / )a
• Establish aframeworkfor long-term involvement, supporting the development ofa supportive
constituency and enabling the County to take a leadership role
• Create a checklist with evaluation criteria that defines success
Strategies; Committee members identified a preliminary set ofoutcomesfor strategies
• Will include both short-term, high-impact, achievable components to make an immediate
difference to get people housed(24 months)
• Will include long-term objectives that will allow us to envision comprehensive solutions and
address the complexity ofthe issues(5-7 years)
• Must be action-oriented
• Need a serious reality test to determine which are most effective
• Can bolster the County's role in housing including things that the County can do to encourage
cities to take action
• Must include a middle-class component addressing the broad continuum ofhousing needs.
The Process: The Committee discussed the scope ofthe work needed to complete the process.
There will be three phases.
• First, an eflScient research phase will compile and present information that will lay a
foundation for xmderstanding the issues related to the housing crisis. There are a significant
number ofexisting reports and data sets that examine the housing situation in various ways.
Four workgroups will review the relevant content ofthose reports and identify which pieces
are most useful in a determination ofneeds and solutions. AH workgroup meetings will take
place at the offices of Housing Trust: 111 W.St. John Street, 7th Floor, San Jose.
• Using fiiat information as a baseline, the second phase will involve developing, analy2mg and
prioritizing strategies to be included in the action plan. That second phase will begin with a
"retreat-style" general meeting on July 18th fi-om 3-8:30PM at the Housing Authority. This
work will continue until the next general meeting on August 15th.
• Phase three will synthesize the first two into the final report to the Board ofSupervisors.
The following is a description ofthe focus ofeach ofthe four workgroups in phase one. ^
Included are the issues identifiedfor inquiry, composition and meeting schedule:
A)The Need: An Overview
Focus: Present efficiently the scope ofthe crisis and the real housing need(look at Census 2000
data and existing reports)
Research Issues: Demographics; housing costs(rental rates, home prices); vacancy rates;job
growth; housing production levels; definition ofa sufficient number ofunits; definition of quality
housing; overcrowding (fiunilies per unit); school enrollment; immigration patterns; community
impact ofless home ownership; similar trends in other regions; TANF enrollment; gentrification.
Who: Ron Johnson, Candy Capogrossi, Tracey Chew,Dunia Noel,Ray Villarreal, Gertrude
Welch
When: Thiusday, June 28,6:30PM; Tuesday, July 10,6:30PM; Monday, July 16,6:30PM;
[ifnecessary: Thursday, July 26,6:30PM; Tuesday, August 7,6:30PM]
B)Interrelationship: Regional Issues
■
Focus: Describe the interrelationship Ofhousing to other regional issues:(i.e. land use,
transportation, wages)
Research Issues: Zoning; Tax policy/fiscalization ofland use;jobs/housing imbalance;
r
transportation; wage and income trends; traffic congestion/location ofhousing relative to jobs;
school capacity; environmental impact; infrastructure (water, sewers).
Who: Steve Ghckman,Art Henriquez,Kevin Malone, Bill McWopd,Dunia Noel,Ben Spero,
Paul Stewart.
When: Thursday, Jime 28,4PM;Tuesday, July 10,4PM; Monday, July 16,4PM;
[ifnecessary: Thursday, July 26,4PM; Tuesday, August 7,4PM]
C)Housing: Broadly Defined
Focus: Understand supply/demand imbalance and barriers to housing development:(i.e.
fiscalization ofland use, financial constraints, etc.)
Research Issues: Fumcing constraints; growth controls; regulatory numbers from state (state
guidelines for assistance); NIMBYism;impact ofintensification ofuse(density, municipal
services); development costs;jobs/housing imbalance; tax structure/fiscalization ofland use;
return on housing investment; entropy; lack ofinfrastructure (water, sewers, energy);
coordination between agencies; lack ofincentives to keep housing affordable; limited varieties of
new housing.
Who: Alyson L. Abramoyritz, Larry Boales, Bob Dougherty, Steve Glickman, Art Henriquez, Ben
Spero, Greg Tomkins, Saul & Billie Wachter, Heidi Wolf-Reid
When: Thursday, June 28,6:30PM; Thursday, July 12,6:30PM; Monday,July 16,6:30PM;
[ifnecessary: Thursday, July 26,6:30PM; Thursday, August 9,6:30PM]
D)Affordable Housing
Focus: Understand the specific issues related to affordable housing.
Research Issues: Middle-ineome/lst time homebuyers; special needs; lower-income;
undocumented; seniors; transient(students, weekly workforce); homeless;emergency; attemative
housing (shared, multLgeneration femily).
Who: Alyson L. Abramowitz,Ron Johnson, John Ordonez, Louie Rocha, Maria Romero-Aranda,
When: Thursday, June 28,4PM;Thursday, July 12,4PM;Monday,July 16,4PM;
[ifnecessary: Thursday, July 26,4PM;Thursday, August 9,4PM]
Process Considerations: The Committee was'asked to discuss their thoughts, concerns and
ideas about the process to address any identifiable pitfalls and point us in a constructive
direction as we moveforward.
• A large body ofknowledge currently exists and needs to be analyzed.
• This will be a Coimty report, sent to the Board ofSupervisors for adoption and,therefore, we
will need to coordinate closely Avith Supervisor Beall's office.
•
•
•
•
•
The final report must not be either a "problems report" or a "list ofsolutions"
It is easier to identify problems that viable solutions
Previous processes have lacked:
A clear vision in terms offinal outcomes and products.
A connection to the political /institutional resources necessary to implement them
• Amlytical thinking, wMch is imdermined by "list-nmking"
• A real response to the costs and resources needed to address housing
• Housing lacks an adequate constituency to create the political will that moves elected leaders
and reluctant staffto make housing a resource priority.
• Addressing the housing crisis involves fectors external to local control(i.e.job growth,tax
system)
• Long-time advocates feel the frustration offew successes and lots ofeffort
• Who else needs to be around the table: Cities(elected officials, city managers, planning
department and CDBG stafO» County policymakers and staff, builders/developers, finance
experts,trade associations and community members.
• Hold day & evening meetings when possible
• Ask for Written comments
.
Next Steps; Committee members committed to help secure copies ofreports and data, which will
be compiled by staffin anticipation ofthe workgroups. That infopmation will be disseminated at
next generalmeeting on Wednesday, June 27at6:30PM at the Housing Authority(505 W
Julian St. San Jose). Workgroups will begin meeting thefollowing dcy, Thursday, June 28th at
the Housing Trust offices(111 W St John Street, 7th Floor, San Jose)
SANTA CLARA COUNTY HOUSING TASK FORCE:
REGIONAL HOUSING ACTION PLAN
COMMITTEE:
RESEARCH PHASE
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee
Research Phase Working Groups
Documents reviewed for Working Group Packets [June 20011:
1.
2.
The Right to Housing. Institute for Policy Studies Working Group on Housing
Looking to a Higher Authority: Can the State Help Solve Our Housing Problems? Santa
Clara County Planning Office
3. Housing LA
4. Growth Projections for Santa Clara County 2000-2020. ABAG
5.
Conditions and Trends in Santa Clara County. ABAG
6.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues 5-Year Plan
(Draff)
7.
Building Sustainable Communities: Housing Solutions for Silicon Vallev. Silicon Vallev
Manufacturing Group and Greenbelt Alliance
8. Silicon Vallev Projections 2000. Silicon Vallev Manufacturing Group
9. Not Safe At Home. The Doc4Kids Project. Boston Medical Center
10. Obsess: Whv the Bay Area CanT Stop Talking and Thinking About Real Estate, bv Bonnie
Wach
11. Housing in California, Controller's Quarterly
12. Raising the Roof: California Housing Development Projections and Constraints 1997-2020.
(California Department ofHousing and Community Development. Mav 2000
13. Draft Compact for a Sustainable Bay Area, Bay Area Alliance
14. Joint Venture's 2000 Index of Silicon Vallev
15. Joint Venture's 2001 Index of Silicon Vallev
16. Bridging Borders in Silicon Vallev: Summit on Immigrant Needs and Contributions. Santa
Clara County Office on Human Relations
17. In Short Supply: Recommendations of the Los Angeles Housing Crisis Task Force. Mav
2000
18. Everyone's Vallev: Inclusion and Affordable Housing in Silicon Vallev. Working
Partnerships. Mav 2001
19. Santa Clara County Consolidated Plan 2000-2005. Mav 2000
20. City ofSan Jose Consolidated Plan. 2001 Annual Action Plan
21.
22.
23.
24.
ABAG Projections on Housing Need
Vallev Transportation Plan 2020
Locked Out: California's Affordable Housing Crisis California Budget Project Mav 2000
Census 2000 data(what is available)
25. Further Concerns Regarding the Low-Income Housing Crisis in r.ahfnmia bv Radha
Bhattacharva. Dept. ofEconomics. California State University. Fullerton April 2001
26. Stilled Locked Out, California Budget Project. March 2001
27. San Jose Mercury News. June 26. 2001
28. Santa Clara County Collaborative on Affordable Housing and Homeless Issues Gaps Analysis
29. Other sources as cited
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING NEED
prepared by:
Susan Silveira
Springboard Consulting
Housing Need
The State Picture
Renters Face the Greatest Affordability Challenges
Over four out often(43 percent) ofall California households are renters, and renters face
the greatest affordability challenges. In 1997, nearly a quarter ofthe renter households in
the state's metropolitan areas(1 million out of4.2 million households) spent more than
halfoftheir incomes on rent. A total of2 milhon renter households paid more than the
recommended 30 percent oftheir incomes toward shelter. All indications suggest that the
situation has grown worse over the past three years.'
After accounting for federal. State, and local housing assistance, 3.1 milhon California
households still paid more than 30 percent oftheir incomes for housing in 1995. Nearly
two-thirds(65 percent) oflow-income renters paid more than halftheir income for
housing in 1997 and 86 percent spent over the recommended 30 percent oftheir income
on housing.^ Altogether, 2.4 million low-income California households overpaid for
housing in 1995.'*
The number of Califomians in need of affordable housing far outstrips the supply oflow
cost units. In 1997, the number oflow-income renter households in the state's
metropolitan areas exceeded low cost rental units by 2.1 -to-1, a gap of684,000 units.
Over the past decade, the cost ofrental housing has risen faster than inflation in the state's
two largest metropolitan areas and faster than the incomes ofthe average California
femily. Rental housing costs increased 14 percent in Los Angeles and 38 percent in San
Francisco between 1989
M«(iy
R«n1«f« f4t« Signik^iil HoutinQ C9«l6u(d«i»
and 1998, while the
income ofthe median
Nentan Payinq C>v«
Renters Payinq O/cr
3OV10I th«ii bKom*
SOS ot their income
lewvd llAU&in^
renter household
toward Housing
P*tc«nt4q»
Nunik*!
Percentage
and the median income of MfVopoMsn Calfhrria (199^]
47%
1 ,%99riCI
24%
renter households with
63%
178230
24%
82;:00
2S%
434.1GG
increased by 9.6 percent
Amiheim-Sartf Aiia i}994)
Numbei
children increased 6.3
Loa Angebs-Lonj Beach(1997l
51%
aiefioo
percent.^
Oskt^rid(i998i
43%
148,100
22%
7e.4(]c
is&mo
23%
as^ori
River»ide-San BeitiarciinD (199i)
47%
iQimo
21%
46;:DD
SanDivgo (1994]
66%
216.700
20%
103 OGU
SanFranckco ii1999i
42%
141 900
21%
73£CC
4^%
i"Rm
21%
4.3,= T
£acramefto (1
Fan
■ T!
Stufct: U S Dettirtr ert cl C cr r
BLWWofthe Censie.irfl US Denahmefit giHcuengt eiio Urti» i
usvdis^mBn:. Kitaican Housro &
'Locked Out; California's Affordable Housing Crisis, California Budget Project May 2000
^ Locked Out: CalifOTnia's Affordable Housing Crisis, California Budget Project May 2000
'Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
* Raising the Roof: California Housing Development ProiectiOTis and Constraints 1997-2020, Califwriia
Department of Housing and Community Development May 2000
'
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
® Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Rents Oiflpace Household Incomes
1 r-
* •■9H.
•SH
lUH
•(
-4.5^.
-
Oh
P nrw S
Iwil.
i'»_r
11
CliM-
Statewide, 45 percent of California renters were unable to afford the FMR on a two-
bedroom apartment in 1999. Even in areas where housing costs less, lower incomes make
rents unaffordable. In the rural counties that constitute the state's most affordable housing
markets, where the FMR for a two bedroom apartment is $483 per month, a full-time
worker would need to earn $9.28 per hour to afford the rent — 161 percent of California's
minimum wage.'
Mtiny California Ranters are Unable ta Afford a
Twini Bedieem Apailmeni
•T- f rt*
|«1S
I
IbiH
I
t-v
III iiygi illte W Uwiite »
Fiir
' Locked Out: CalifOTnia's Affordable Housing Crisis, Califania Budget Project May 2000
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a boomii^ economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent of California households owned their own homes in 1999,
con^ared to 66.8 percent for the nation as a whole.®
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent ofhouseholds could afford to purchase the median priced
home in 1999, as compared to 37 percent of California households. Only 27 percent of
the region's households can afford the n^dian priced home in the Bay Area, and even
fewer(23 percent) can afford the median priced home in Monterey County. The median
California household earns less than two-thirds the income needed to purchase the
median priced home.^
Houting
in CiKtoiaia w W«ll Balow Mm Nalwnd
1-^
lou
;aii
tfj
tcB I
«i>
tcta
loitt
* Locked Out: California's Affwdable Housing Crisis, Califcmiia Budget Project May 2000
'
Locked Out: California's Affordable Htmsing Crisis, California Budget Project May 2000
CJlMnU'b Hmbwwdoi*!)^ R««t L<is TIh»»« of th«N44*«
f.'li
_
_
.
.
.-
—
•ji
••
41 ftS
77a
itr-
"s...
..
3
•
«
4.
--
is
IvV:]
i
is\V:1
Vf
S"
...
...
j
...
%
\
\
California's low-income homeowners experience significant housing cost burdens. Over
half(54 percent) ofthe low-income homeowners in the state's metropolitan areas spent
over half oftheir income for housing in 1997."^
California's high home prices make it difficult for renters to become homeowners. The
income needed to purchase the median priced home is more than twice the income ofthe
state's median renter household ($27,401 in 1998). Fewer than one out oftwenty new
homes sold in 1999 were affordable to households with incomes at or below the median
for California renter households.''
Overcrowding Worsens as Housing Costs Rise
According to Census estimates, 1.2 million households lived in overcrowded conditions
in 1990. Rates ofovercrowding for very-low income households range fix)m six to
fourteen times higher than for other households, depending on the metropolitan area.'^
The prevalence of overcrowding nearly doubled between 1980 and 1990, and has
worsened in the last decade. In 1997, 13 percent ofrenter households in the state's
metropolitan areas lived in overcrowded conditions.'^
The single most significant fector associated with overcrowding is the presence of
children in a household. In 1995,40 percent ofthe state's children lived in renter
households that were overcrowded and one ofout six lived in severely overcrowded
households. Not surprisingly, large families are especially likely to live in overcrowded
housing.''*
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, CalifcMmia
Department of Housing and Community Development May 2000
"Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis, CalifcMnia Budget Project May 2000
Lack of Housing Limits Families' Ability to Leave Welfare for Work
A geographic mismatch between high employment growth areas and affordable housing
limit welfare recipients' access to jobs. The wages typically earned by those transitioning
from welfere to work are insufficient to oflfeet increased housing costs in areas where ^
employment opportunities are better.
Current levels ofcash assistance severely limit families' housing options. Based on
current Fair Market Rents,femilies rel5dng on CalWORKs,the state's cash assistance
program for poor families, pay over 60 percent oftheir grant toward housing in all
California counties. California's Welfare recipients are also less likely to receive federal
housing assistance than are welfare recipients in other states. In 1997, only 13 percent of
families receiving AFDC received federal housing subsidies, compared to 23 percent ft>r
the nation as a whole.In feet, California ranks 49th among the 50 states, with only
Michigan having a lower share of welfare recipients receiving housing assistance.
While Seniors are More Likely to Own their Own Homes,Senior Renters Face
Significant Cost Burdens
While the housing cost burdens ofseniors who own their own homes are modest in
comparison to other Califomians, a third ofsenior homeowners pay over 30 percent of
their income for housing. Seniors who rent face significant cost burdens, with 65 percent
paying in excess of30 percent oftheir incomes for rent and 41 percent paying more than
h^oftheir incomes for rent. The high rent burden poses a significant problem for
seniors since they are more likely than younger renters to be living on a fixed income. An
elderly or disabled SSI/SSP recipient would spend over halfofhis or her income for a
studio apartment in 39 ofthe state's 58 coimties.
Substandard Housing
Approximately twelve percent ofthe State's housing stock is in need ofrehabilitation.
Homeless
Although inherently difficult to quantify, California's homeless population in 1997 was
estimated at 360,000 persons, about 1.1 percent ofthe State's 1997 population.'^
Units At Risk
As of 1998, more than 3,200 rental housing projects, encon^assing 185,000 units were at
risk ofconversion throughout California.'^
Raising the Roof: Califomia Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Community Development May 200
Raising the Roof: Califomia Housing Development Projections and Constraints 1997-2020, Califomia
Department ofHousing and Community Development May 200
HOUSmG NEED
Santa Clara County
Ijower Income Households
• Based on 1999 estimates, there are 149,915 adults and 220,754 children living
below the federal poverty level in Santa Clara County.'®
Disabled Persons
• There are 57,919 individuals with a work disability in Santa Clara County. Of
these, 24,823 cannot work due to their disability.'^
• There are 95,000 mentally ill persons in Santa Clara County, halfare on public
"70
assistance
There are 40,863 persons receiving SSI in Santa Clara County.
21
Elderly
According to 1990 US Census data,7% ofthose in Santa Clara County living
below the poverty level are persons over the age of65.^ This suggests that,
based on 1999 population estimates, there are 10,494 persons over the age of65
living below the federal poverty level.^^
Persons with HIV/AIDS
• There are 1,203 persons with AIDS living in Santa Clara County.^"
Agricultural Workers
• There are 3,500-5,500 agricultural workers earning $11,960-$13,000 and only
300 beds at Ochoa provided by the Housing Authority ofSanta Clara County
Homeless
• There were at least 20,000 episodes ofhomelessness by individuals and families
in Santa Clara County over the last year,^®
Veterans
• In the 1999 homeless survey, 19% ofthe respondents were veterans.^'
• As ofJanuary 10, 2000,there are 83,935 veterans in Santa Clara Coimty.^®
Youth
• According to the most recent homeless survey,60% ofhomeless children were
under the age of 12, with 19% between the ages of13-17.^'
US Census Bureau, Santa Clara County QuickFacts
Housing Needs Assessment for Persons with Disabilities: Final Report,Prepared for City of San Jose
Department ofHousing by Vemazza Wolfe Associates, Inc., December 1997, p.8
Hospital Conference ofSanta Clara County, Community Health Needs Assessment for Santa Clara
County. Jime 1996, p. 12
SSI Recipients by State and County, The OfBce ofPolicy, Social Security Administration December
1999.
^ 1990 US Census Data
US Census Bureau, Santa Clara Coimty QuickFacts
^''Santa Clara County Consolidated Plan for 2000-2005 May 9,2000 p 2-44
^ Santa Clara County Consolidated Plan for 2000-2005 May 9,2000 p 2-47,48
1999 Santa Clara County Homeless Suryey Jerome Burstein and Linda Woodsmall September 8,2000
1999 Santa Clara County Homeless Suryey Jerome Burstein and Linda Woodsmall September 8,2000
California Employment Deyelopment Department, Labor Market Information Diyision, Information
Seryices Group.
California, Employment Deyelopment Department, Labor Market Information Diyision, Information
Seryices Group.
• The Emergency Housing Consortium estimates there are as many as 1500
homeless teenagers found in downtown San Jose during the course ofone year.
Domestic Violence
• In 1999,the total percentage ofhomeless women who experienced domestic
violence was 22.6%.^®
Current Inventory of Low-Income Housing
Santa Clara Coimty has approximately 26 emergency shelters, providing 1,020 beds year
round, and 1,270 beds when the armories are opened during &e winter. Nonetheless,
1,000 people are left sleeping on the street on a typical night."'
A recent survey conducted by First Community Housing revealed that there are 223
affordable housing complexes in Santa Clara County providing 22,084 units ofaffordable
housing serving primarily individuals and families with incomes between 50-120% ofthe
County's median income.
According to the recent 2001 Index produced by Joint Venture, the overall development
ofnew housing units fell by more than 50%,from 12,060 in fiscal year 1999 to 5,370 in
fisc^ year 2000. Ofthose units, 31% or 1,600 are affordable housing units. This index
report does not indicate whether these housing units are for rental or ownership housing.
However,there is an implication that these units may represent rental housing affordable
to those making up to 60% of median income.^^
There are 225 wheelchair-adapted imits in the entire county.^ While the precise need for
these types ofunits is not known,the fact that close to 25,000^^ people in this county
cannot work due to a physical disability suggests that more ofthese types of units are
needed.
One ofthe tasks undertaken by the special needs housing advisory working group was to
attempt to ascertain the number ofclients currently receiving housing and housing
assistance fi*om County agencies. The chart on the next page reflects estimates, which
are in some cases yearly or monthly averages. It should be rioted that agencies that
contractfor the provision ofhousing report that all contractedfacilities arefull to
capacity on a daily basis.
Ibid.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues' Five Year Plan (Draft)
June 2001
This number does not include board and care and other types ofhousing that are not apartment
complexes.
Joint Venture's 2001 Index of Silicon Valley prepared by Collaborative Economics, p.19, January 2000.
Santa Clara County Consolidated Plan for 2000-2005 p. 2-38
Housing Needs Assessment for Persons with Disabilities: Final Report,Prepared for City of San Jose
Department ofHousing by Vemazza Wolfe Associates, Inc., December 1997, p. 8
Clients Receivinq Housing Assistance with Services*
from Santa Clara County Agencies
Emergency
Shelter
Transitional
Housing
160
238
Permanent
Supportive
Permanent
Housing
538 (includes 50
41
Mental Health
Mentally Disabled
Shelter Plus Care
Beds)
Alcohol & Drugs
10
Men
5
Women
97
54
59
Families w/Children
50(Shelter Plus
Care)
Family Reunification
35^
-Children
Family & Children's
Services
-
Persons Living with
Developmental Disabilities
50
4
5
Children w/ HIV
Lower Income Households
<50% of median (Family
Unification Program)
187
Youth
Aged Out(18-25)
Runaways
Foster Care
17
102
727
1589
8
312
36
Domestic Violence
7
11
Women
4
Women w/Children
Substance Abusers
Women
62
Recovery Clients
10
5
17
11
6
Mental Health
Children w/ Medical
Needs
TOTALS:
40
21
505
1310
2527
107
* Reflects information obtained during the.working group sessions in Dec. 1999 & Jan. 2001.
* The Department ofAlcohol and Drugs contract for a total of255 transitional beds. Ofthese, 193 have a
length ofstay up to 90 days and 62 beds have a 6-9 month length ofstay.
Housing Authority
The Housing Authority ofthe County ofSanta Clara provides low- income housing and
low income housing assistance for the residents ofSanta Clara County, The following
chart shows the numbers ofclients served through Section 8 assistance, Public Housing
and housing created through the state tax credit program.
Housing & Housing Assistance Provided By The Housing Authority Of Santa Clara
County
Tvoe of Housing/Clients
Program
Number
Served
Section 8 Programs:*
Family Self-SuflSciency
Low-Income Families
Welfare to Work
Shelter Plus Care
Families(100% TANF)
Homeless/Dually-Diagnosed
120
Mainstream
Persons with Disabilities
163
After Care
Persons with Developmental
75
450+
810*
Disabihties
Family Unification Program
Open Child Welfare Cases
Others
Low-Income Individuals/Families
136
9845
11,149
TOTAL:
Other Housing Programs
Number of
Units
Public Housing
Low Income Housing Tax
Credit Program
Low Income Individuals/Families
Low Income Individuals/FamiKes
560
1242
The Santa Clara County Collaborative on Affordable Housing and Homeless Issues
prepares a yearly Continuum of Care Gaps Analysis for the McKinney Homeless Fund
application. According to that document, here is the current inventory ofhousing as it
relates to homeless housing for the purposes ofthis funding application.
Individuals
Families
TOTAL
809
410
1219
Transitional Housing
592
674
1266
Permanent Supportive Housing
438
368
806
1839
1452
3291
Emergency Shelter
TOTAL:
* Section Sassistance is only viable for those special needs clients who can qualify for housing that costs
less than 50% and in many cases less than 30% ofmedian income.
'
This munber will increase to 1066 by June 2001.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues, Continuum ofCare Gaps
Analysis 2001
Low Income Housing Need
The Association ofBay Area Government provides projections ofhousing need based on
an economic analysis ofthe area. Here are their current projections:
Very
Low
Moderate
Above Moderate
Total
5,173
15,659
25,735
57,991
Low
Santa Clara
11,424
County^'
The Santa Clara Coimty Collaborative on Affordable Housing and Homeless Issues must
also report information on the unmet housing need for the homeless in Santa Clara
County for their McKinney Homeless funding application. Here are those current
figures:
Individuals
Families w/Children
Total
Emergency Shelter
381
476
857
Transitional
841
1013
1854
Permanent Supportive Housing
504
1277
1781
1726
2766
4492
TOTAL
Housing Authority WaitingUst
As ofNovember 2000,there were 26,331 persons on the Section 8 waiting list for Santa
Clara County. Ofthese, 3849 are elderly, 4741 are disabled and 4168 identify
themselves as homeless.
There are 6000 persons on the public housing waiting list.
There are more than 41,000 persons on the waiting list for the Low Income Housing Tax
Credit Program.
Mobile Home Residents
Over the past five years there has been a loss of944 mobile home housing units in the
Urban County.
Conversion Tenants
There are 7,726 units oflow-income housing at risk ofbeing converted to market rate
housing.^'
This is a countywide figure, including all cities in Santa Clara County.
Santa Clara County Collaborative on Affordable Housing and Homeless Issues, Continuum ofCare Gaps
Analysis 2001
Santa Clara Coimty Consolidated Plan 2000-2005 May 2000 p.2-50
10
Rising Rents
Average rents increased 26% at turnover in 2000; median household income increased
2%.''°
In one three month period in the year 2000 the rents for vacant apartments shot up by 19
percent in San Mateo County, 18 percent in Santa Clara County and 13 percent in Sah
Francisco County, according to Real Facts, which collects information on apartment
con^lexes with 50 units or more. The vacancy rate fell to 0.6 percent in Santa Clara
County,the lowest rate region-wide since 1996."^^
As ofJune 2000, average rents for one-bedroom were $1,967 in San Francisco,$ 1,973 in
Palo Alto-Menlo Park, $1,415 in San Jose, and $ 1,550 in Santa Clara Coimty. At that
time, an affordable rent(30% Ofgross income)for a low-income household was $620.^*^
Housing Production
The number ofnew housing units approved by Silicon Valley cities fell by more than
50%,from 12,060 in 1999 to 5,370 in 2000.^^^ From 1980 to 1998, Sihcon VaUey added
approximately 154,900 new homes to its current housing supply of579,329 units.
Annual average production rates peaked in the late 1980s, with an average of 11,462
units being added every year from 1985-1990. Annual average housing production
between 1995 and 1999 was only about 7,500 per year.'*'^
To meet demand, California homebuilders would have to construct and average of
220,000 additional housing units each and every year through 2020. Since 1987, new
single and multi-family home production has averaged just 141,000 units per year.'*^
Land
With appropriate reserves being maintained, Los Angeles, Orange and Santa Clara
counties will lack sufficient vacant suburban land to accommodate projected household
growth through 2010/^
The total land supply currently identified in Silicon Valley as having potential for
housing production totals 10,600 acres. Based on current local policy and market
conditions, this land supply could yield over 74,300 new homes. However,this falls well
below projected demand, based on current employment growth projections. The gap
between potential supply and projected demand could be greatly reduced by both
Joint Venture 2001 Index of Silicon Valley
Ibid.
42
Ibid.
\
Joint Venture 2001 Index of Silicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley,Prepared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999 and US
Census Bureau, Census 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Depmtment ofHousing and Community Development May 2000
'Turtho- Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
11
increasing land supply and the number ofhomes built per acre. The current projected
supply ofnew homes in Silicon Valley only meets 50-66 percent ofprojected demand.
Just by increasing the number ofhomes built per acre from the current projected average
ofseven to nine per vacant acre and from 12 to 25 homes per reuse acre, the region could
meet 75-99 percent of demand."*^
Approximately 40 percent ofpotential future housing development in Silicon Valley will
be on land that is currently underutilized, rather than vacant. ^
Halfofthe cities in the Silicon Valley already estimate that reuse sites will provide more
opportunities for new home construction than vacant sites. These cities include San Jose,
Milpitas, most ofthe large cities in northwest Santa Clara County(including Cupertino,
Palo Alto and Sunnyvale), and all ofthe cities in southern San Mateo County,
Plarmers in most Silicon Valley communities acknowledge that they have not done a
comprehensive survey ofpotential reuse sites, and that the potential number ofnew
homes that could he built on these types ofsites will increase significantly beyond current
estimates if cities take better advantage ofreuse opportunities.^
Demand for Home Ownership
Among Bay Area counties, and based solely on projected demographic characteristics,
the incremental demand for homeownership will be strongest in San Francisco, San
Mateo and Santa Clara Counties. Region-wide,the incremental demand for
homeownership units could exceed that ofrental units by a 2.8-to-l ratio. By 2010, given
adequate production, the homeownership rate in Contra Costa County could top 70
percent. Even in San Francisco, where only on in three households is currently a
homeowner,the incremental demand for homeownership will likely exceed the
incremental demand for rental units. Region-wide,the demand for ownership housing in
2010 will exceed 1.7 million.^^
Demand for Rental Housing
Among individual counties, the largest increments ofnew rental construction between
1997 and 2010 will be needed in Los Angeles(+216,000), San Diego (+125,000),
Riverside(+76,000), San Bemandino (+73,000), Orange(+57,000), Sacramento
(+40,000)and Santa Clara(+36,000.)^^
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
™ Building Sustainable Commimities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Raismg the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Community Development May 2000
12
Jobs/Housing Imbalance
More than 70 percent of Silicon Valley's total enployment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Moimtain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo Coimty produced 0.7jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^'*
Over the next 20 years(2000-2020)between 66 and 72 percent ofhousing demand wiU
be in San Jose/Milpitas and northwest Santa Clara County,the same areas projected to
capture approximately 67 percent of Silicon Valley's total new job growth. ^
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s.^^ ABAC reports for 1995-2000 an average countywide ratio ofnew jobs to new
housing units of6 to 1, with the five highest being in Santa Clara, Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
coimtywide ratio ofnew jobs to new housing units of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara, Palo Alto and Moimtain View.^^
Since 1992,jobs have grown four times faster than housing. To keep pace with job
growth, the region would have to build an additional 160,000 units.^® Other estimates
indicate that Silicon Valley will need between 112,039 to 146,366 additional homes
between 2000 and 2020.^^ The San Jose/Milpitas sub-region will generate 44-50 percent
oftotal housing demand,followed by 16-28 percent in northwest Santa Clara County,
and 13-15 percent in southern Alameda County. Southern Santa Clara County, southern
San Mateo County, and southwest Santa Clara County account for approximately 18
percent offuture housing demand.®*'
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the SilicoP
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Commxmities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley, Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
"ABAG Projections 2000
Joint Venture 2001 Index of SUicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley, Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
13
Between 2000 and 2010,the rate ofjob growth in Silicon Valley is projected to
substantially outpace the rate ofgrowth in households(13 percent versus 8 percent).^'
For the third year, Software added the most new jobs.
Since 1992, the first year ofthe regional employment dataset, Silicon Valley has seen a
net increase of more than 329,000 new jobs. The total number ofjobs in the region is
1.35 million.^^
By the year 2004, Santa Clara County will witness the creation of32,000 new jobs in the
traditionally low-wage food service and building maintenance industries and the retail
sector.®'^
Overall employment in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000jobs, including
replacement for the 22,000 jobs the region is estimated to have lost between 1990 and
1995. Over one-halfof alljobs added in the region from 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in Sihcon Valley indicate that the incredible job growth currently being experienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
more between 2010 and 2020, down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
Wages
Average wages in industry clusters continued sharp ascent with Software reaching
$125,000 and Semiconductors $117,000.^®
In 2000,the region's average wage increased 9% in real terms, from $60,800 to $66,400.
This increase compares to a national increase of2% to $36,200.^^ In 1999, the region's
average wage increased 5.1 % in real terms, from $51,100 to $53,700. This compares to
a national increase of3.4% to $ 33,700.^®
Average wages for industry clusters increased 20%; wages in other industries increased
1%.^^
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Joint Venture's 2000 Index of Silicon Vall^
^ Everyone's Valley, Working Partnerships USA
Building Sustainable Gommnnities: Housing Solutions for Silicon VaUev,Prepared for the SiUcon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
®®Ibid.
Ibid.
Joint Venture 2000 Index of Silicon Valley
® Joint Venture 2001 Index of Silicon Valley
14
A representative household at the bottom 20% of Silicon Valley's income distribution has
less income now than in 1993. A representative household in the bottom 20% earns an
estimated $40,000. In the last two years(1998-99), households at the bottom 20% of
the income distribution saw their income increase slightly, but their 1999 income
remained below 1992 levels.'^
Incomes for the top earning 20% ofhouseholds rose an estimated 20% in inflation-
adjusted terms since 1993 to $149,000.^^
■
V
•
•
The econonty ofSilicon Valley resembles an hourglass with higher paying jobs offering
generous benefits growing at one end, whilelow-wage jobs providing few benefits grow
at a far more rapid rate at the other. The Califomia Employment Development
Department estimates that from 1997-2004,four ofthe ten fastest growing occupations in
Santa Clara County offer workers annual incomes ofless than $ 21,000.'^
Overcrowding
Almost one ofevery ten rental housing units in Santa Clara County is overcrowded. In
San Jose, at least 38,000 femilies are living in overcrowded conditions.
Population Growth
ABAC population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow dowm Overall,the Valley's population is
projected to increase by about 11 percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010,and 3.6 percent growth between 2010-2020. The cities
e}q)ected to e3q)erience the most dramatic popvilation incre^es between 2000 and 2020
are Morgan Hill(30 percent)and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda County.'^
Immigrants
Santa Clara Coimty is a majority minority county with more Asian or Latino immigrants
than any other Bay Area county. Approximately 49% are \diite, 25% Latino,23% Asian
and 3% black. Similarly the City ofSan Jose, the 11*** largest city in tihe United States, is
a majority minority city and has more Vietnamese than any city outside ofVietnam.
In the next two decades, Santa Clara County will gain more new residents(261,400)and
more new jobs(231,000)than any other Bay Area county. San Jose will gain 129,300
'"Ibid.
Joint Venture 2000 Index ofSilicon Vall^
Joint Venture 2000 Index ofSilicon Valley
^^Ibid.
Ibid.
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHuman Relations December 6,2000
15
new residents, reaching a population of 1,054,000. Over the next 40 years, it is predicted
Santa Clara County will grow by 47%,reaching over 2.5 million residents.^^
Except for a few higher-percentage areas like Npw York City and Miami, Santa Clara
County ranks at the very top ofareas within the United States that have a large
percentage ofimmigrants. One-third or 33% ofthe county's population is foreign-bom.'^
Santa Clara County is an immigrant demographic microcosm ofthe United States: five
ofthe top six sending countries to the United States are the top five sending countries to
Santa Clara County. These are Mexico,the Philippines, India, Vietnam, and People's
Republic of China. Similarly, these are the top five countries of origin ofimmigrant
public assistance recipients in Santa Clara County, with Mexico and Vietnam constituting
over 85% ofrecipients within the top five.'^
When we examine the types ofimmigrant jobs in Santa Clara County, the coimty also
reflects the Unites States immigrant occupational stmcture. In the areas of agriculture
work in south county, low-paid service jobs throughout the county, and high-tech
employment in north and west county, Santa Clara Coimty's immigrant job stmcture
represents a microcosm ofthe hourglass economy and a potent portent offanmigrant
employment trends nationally, given the low unemployment rate, the United States'
aging popidation, and the need for younger workers to uphold the social security system.
For example, in Silicon Valley technical workers firom India, China, and Taiwan
dominate the computer and Internet industries(where 36% of Asian immigrants are
employed in professional or managerialjobs, versus 24% for all immigrants and 30%for
the US-bom),and workers from Mexico dominate agricultural and janitorial positions.^''
About one in four ofhigh-tech firms in the Valley were founded by immigrants. In 1996
these firms employed 67,000 workers and generated annual revenues of$27.9 billion.
Since immigrants significantly make Silicon Valley's image ofthe "technobgical center
ofthe world" and produce a lot ofmaterial wealth, there are many articles calling
immigrants vital to the Valley.^'
Strategies for Solutions
In November 1999, the Silicon Valley Manufacturing Group and Greenbelt Alliance
joined forces to produce "Building Sustainable Communities: Housmg Solutions for
Silicon Valley". In that report they make the followmg recommendations:
1. Silicon Valley cities should systematically identify Underatilized sites that can be
redeveloped with new homes.
"Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
OflBce ofHuman Relations December 6,2000
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHmnan Relations December 6,2000
Ibid.
Bridging Borders in Silicon Valley Summit on Immigrant Needs and Contributions, Santa Clara County
Office ofHiiman Relations December 6,2000
16
2. Even relatively small increases in the number ofhomes that can be buUt per acre
will have a dramatic impact on the overall level of housing supply in Silicon
Valley.
3. Supplemental Action Items:
a. Cities should make an explicit commitment to good design and promote
design principles that result in developments that both fit into their
surroundings and support existing neighborhoods.
b. Cities should educate citizens about community issues as part ofa process
for making choices about the fiiture.
c. Many ofthe barriers to creating more housing can only be removed if
cities work together.
The Santa Clara County OflSce ofHuman Relations' Citizenship and Immigrant Services
Program conducted a summit on immigrant issues and published a report with these
findings and recommendations on housing, (pp.202-210)
Finding 1: There is an urgent and imniediate need for low income housing for ^
immigrants in Santa Clara County.
Recommendations:
1
^
■
Policy changes are needed in Santa Clara County so that rental rates in
existing housing do not exceed 30% ofthe total household income.
■ Coimtywide rent control is necessary and should take effect with no
regard to the year the building was erected.
■ It is important to build more quality affordable housing where the
rental rates are based upon household income and family size, like tax
credit housing.
■
The HUD prohibition ofaccess to Section 8 housing on non-qualified
■
immigrants should end.
More affordable housing should be built for more low-income people
making less than 50% of median income.
Finding 2: There is an immedkte need for emergency transitional housing for
immigrants in Santa Clara County. Emergency transitional housing as used here means
1,2, or 3 bedroom units that are made available for immigrants for a six to twelve month
period oftime until they become established in the count.
Recommendations:
■
■
Santa Clara County should help seek at least 100 affordable rented or
leased units ofrefiigees and immigrants and contract with reputable
resettlement agencies to help manage and run these transitional units.
This type ofhousing can provide one-stop transitional services for
recent arrivals, using existing service providers. These units could be
used as a training area for clients.
17
Finding 3: Lower income immigrant households are finding it extremely difficult to
purchase any housing due to lack ofcredit.
Recommendations:
■
Santa Clara Coimty should help facilitate an easy and affordable loan
process for immigrants so that immigrants can purchase their first
home.
■
The County should facilitate programs to lower the interest rate for
first time homebuyers.
City ofLos Angeles: Their Crisis and Strategies for Addressing It
The City ofLos Angeles is experiencing many ofthe same painfiil symptoms oTa
deepening affordable housing crisis as is found in Santa Clara County. Consider:
1. In 1999; the fair market rent for a two- bedroom apartment was $766. In order to
expend only 30% ofincome on this apartment an hourly wage of$14.73 is
required, more than twice the minimum wage and almost double the living wage
of$8.76 in Los Angeles.
2. Over the past ten years the highestjob growth has been in the low-wage earning
sectors ofservice, wholesale and retail. Projections indicate this will continue to
be the case.
3. The Section 8 waiting list opened up for the first time in ten years. About 153,000
families signed, 10% ofall households in the City and nearly three times as many
as holders ofall Section 8 certificates and vouchers.
4. Only 39% ofthe City's households own their own home in contrast to the national
average of66 percent.
5. Between June 30, 1998 and July 1, 1999,the City's population increased by
65,000 persons but only 1,940 net new units were built.
6. Residential construction is constraiued by a number offactors. Construction costs
are high. There is little vacant land left in the City and the land that is available is
hard to assemble into large enough parcels to make a development financially
feasible.
7. In 1990, nearly 30 percent ofthe total housing stock ofl.3 million units were
overcrowded.
8. In the last decade, 12,500 units ofhousing were demolished.
9. Every year the Los Angeles Housing department finances the construction or
rehabilitation of900 to 1000 affordable tinits, while 750 or more affordable older
units are demolished and 500 or more units with federal or local subsidies raise
their reiits to market rate.
10. More than 35,000 units ofaffordable housing are at-risk ofconverting to market
rate.
11. According to the Southern California Association ofNon-Profit Housing,Los
Angeles spends about $23 per person on affordable housing, none ofit from the
General Fimd. In contrast. New York spends $89 per person, nearly four times as
much as Los Angeles. Similarly, Chicago spends $76 per person, San Jose $71
per person and Seattle $66 per person. Between 1986 and 1996 New York Ciify
spent $4.2 billion in mostly city fluids to construct or rehabilitate more than
18
140,000 housing units, more than all oth^ major cities in the United States
combined.
In response to this overwhelming affordable housing crisis the City ofLos Angeles
convened a task force in November 1999 to come up with recommendations. Six
subcommittees were formed to examine fimding, state ofexisting affordable housing,
land use and planning, rental housing, basic research and economic development. Here is
an outline oftheir recommendations.
FUNDING(29-40)
'
1 Calculate Subsidy Gap Yearly and Recommend Ways to Close the Gap
2 Create a Housing Trust Fund funded by:
a. An inchisionary program for residential development
■ Adopt an inclusionary zoning ordinance
" Adopt an in-lieu fee as part ofthe inclusionary zoning
ordinance
■
a.
b.
c.
d.
e.
f.
Comply with the State's MeUo Act coastal housing
requirements
Adopt a linkage fee for commercial development
Redevelopment Agency's Business District Project Area tax revenues.
Citywide property growth
Increase and dedicate a portion ofthe transient occupancy tax
Levy fees on water usage above a first-tier base amount.
Secure stock options in exchange for Community Development Bank
Investments in e-commerce ventures.
g. Study additional fees on luxury items
•
Cable TV fi*anchise fee
h. Local general obligation bond for housing
i. Parking users tax
j. Increase the redevelopment housing set-aside(amend state law)
k. Dedicate to housing production at least 75 percent ofprogram income
generated by repayment ofearthquake and all other Los Angeles Hosuing
Department and Redevelopment housing loans.
3. Complete and Evaluate the Targeted Neighborhood Initiative Before Committing
New Funds
4. Improve the Condominium Conversion Fees Program
5. Dedicate future redevelopment revenues fi-om Bunker Hill project area to affordable
housing development.
6. Actively support a state general obligation bond for affordable rental housing.
7. Support a change in federal law to fecilitate using Home fimds for developments that
utilize low-income housing tax credits
8. Revise the state statute oflimitations for condominium construction defect litigation
9. Consolidate the housing fimctions ofthe Los Angeles Housing Department and the
Community Redevelopment Agency.
STATE OF EXISTING AFFORDABLE HOUSING(43-48)
19
1. Develop a Preservation Strategy for All At-Risk Affordable Housing
2. Ensure Enforcement ofthe Rent.Stabili2ation Ordinance in Pre-1979 Housing Where
the Owner has Prepaid the HUD Mortgage
3. Create the Position ofAffordable Housing Preservation Coordinator
LAND USE AND PLANNING(53-65)
1. Modify the City's Zoiung Code to Promote Affordable Housing
2. Expedite Processing for Housing Development
3. Improve Public Access to Planning, Zoning and Building and Safety Information
4.
Create Greater Affordable Incentives
5. Increase Home Ownership Opportunities by Permitting the Development of
Accessory Units
6. Ensure the Safety ofRenters by Creating Habitability Standards and a Legalization
Process for Illegal Units
7. Establish a New Entity to Provide Ongoing External Leadership to Address the
City's Housing Crisis
8. Educate the Public About the Need to Increase the Supply ofAffordable Housing for
all Income Groups
9. Integrate Affordable Housing in Major Projects Such as New Schools and Transit
Development
10. Encourage Sustainable Development and Green Building Practices
RENTAL HOUSING(71-80)
1. Improve the Quality ofPublic Itiformation at the Los Angeles Housing Department
(LAHD)and Make it Easier for the Public to Access
2.
Cross-Train LAHD staff
3. Develop a Citywide Relocation Policy and a Source ofFunding to Assist Tenants
Who Must Vacate Slum Properties
4. Preserve Existing Affordable Rental Housing Stock and Require Affordable
Replacement Housing Under Certain Circumstances
5. Review Systematic Housing Code Enforcement and Conq)laint Driven Programs
6. Increase Incentives for Owner Investment in Affordable Housing
7. Explore the Creation ofMandatory Certification Program for Resident managers
8. Incorporate the Creation and Preservation of Accessible Rental Housing for the
Disabled
9. Endorse Expansion ofthe State Low Income Tax Credit and Limit to Projects
Providing Affordability to Poorest Tenants
10. Aggressively Lobby the Federal government for Additional Fimding for Section 8
Subsidies
11. Create a City Attorney Position Designated to Work Full time with the LAHD to
Pursue Civil Remedies to Enforce the City's Rent Stabilization Ordinance and Other
Related Ordinances
BASIC RESEARCH(83-92)
1. Con^lete and Adopt the Citywide Housing Policy
2.
Create a Research Unit
20
3. Research Zonmg Barriers to the Development ofAffordable Housing
4. Evaluate Policy Altematives to Ensure Adoption ofEffective Policies and Programs
5. Evaluate LAHD Design Guidelines for Consumer Satisfection and Cost
Effectiveness
6. Notify Affordable Housing Developers When Publicly Owned Sites Are Made
Available for Purchase
7. Monitor Implementation ofCost Effective Environmental Programs for Healthy
Homes and Sustainable Building that could be Adopted in LA
8. Evaluate the Performance ofaU City Funded Programs
ECONOMIC DEVELOPMENT(95-97)
1. Help the Working Poor Increase Their Income
2. Educate the City's Workers
3. Launch a Citywide Information and Education Program
21
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING NEED;
SUPPLEMENTAL MATERIALS
REG I 0NAL TREND
INDICATORS
Rate of Job Growth Slows
WHY IS THIS IMPORTANT?
ABSOLUTE AND PERCENTAGE CHANGE IN THE NUMBER
Annual net job gains or losses are a basic measure of economic
health. This indicator is from a unique set of employment data
for the Silicon Valley region (see Appendix B for definition of
the region),
OF SILICON VALLEY JOBS FROM THE YEAR PRIOR
70.000
5.5%
5.2%(
60,000
/
HOW ARE WE DOING?
50,000
3.9%
Ill 2000, Silicon Valley experienced an estimated net increase of
39,200 jobs, a 3,0% annual growth rate.
4.3%
40.000
This rate represents slowed growth frorh the prior five years. At
peak employment growth in 1996 and 1997, Silicon Valley added
at least 60,000 jobs annually and grew faster than 5%,
30.000
20,000
0.9%
Since 1992, the first year of the regional employment dataset,
Silicon Valley has seen a net increase of more than 329,000 new
jobs. The total number ofjobs in the region is 1,35 million.
10,000
1993
1994
1995
1996
1997
1998
1999
2000*
Source: Employment Development Department
^Estimate
Software Adds the Most Jobs; Losses Reversed in Semiconductors and Bioscience
NET CHANGE IN CLUSTER EMPLOYMENT, .
SECOND QUARTER 1999 TO SECOND QUARTER 2000
WHY IS THIS IMPORTANT?
This indicator shows how employment in different clusters and
other industries changed in the most recent annual period.
35,000
30,000
25,000
HOW ARE WE DOING?.
20,000
15,000
10,000
5,000
. 0
1=1
(5,000)
Professional Innovation ■
SemiComputeiB/
Services
Services conductors/ Communi-
Software
Equipment
Bioscience
Defense/
Aerospace
cations
NET CHANGE IN EMPLOYMENT IN OTHER INDUSTRIES,
SECOND QUARTER 1999 TO SECOND QUARTER 2000
8,000-
6,000
For the third consecutive year, the Software cluster added the
largest number of new jobs — 30,700 — from the second quarter
of 1999 to the second quarter of 2000. This increase,was more
than double the 12,600 jobs added in 1998-99, The second-largest,
growth was in professional services with 9,900 new jobs, followed
by innovation services with 6,900,
Two clusters experienced job growth following declines in 1998-99,
The Semiconductors/Equipment cluster added 4,900 jobs, com
pared with losses of 13,400 in 1998-99. Bioscience gained 3,100
jobs, compared with a loss of 1,250 jobs in 1998-99, The Defense
and Aerospace,cluster showed a net job loss, losing 760 jobs.
Of the Qther Silicon Valley industries, Governrrient/Education
showed the largest gains, adding 6,400 jobs. Another growth sector
was Construction/Transportation/Public Utilities, adding 6,400 jobs.
Miscellaneous Manufacturing gained 3,000 jobs in 1999-2000,
after losing 5,700 jobs in 1998-99. Health Services and Finance/
Insurance/Real Estate lost 2,800 and 1,000 jobs, respectively,'
'
4,000
2,000
(2o000)•
(4.000) ■
Govy
Education
Construction/
Misc.
Transy
Mfg.
Public Utilities
Source: Employment Development.Department
Trade
Visitors Agriculture/ Finance/
Health
Industry Resource Insurance/ Services
Extraction Real Estate
LIVABLE ENVIRONMENT
Jobs Increase Four Times Faster than Housing
WHY IS THIS IMPORTANT?
RATE OF GROWTH IN JOBS AND HOUSING PRODUCTION
Building housing cominensurate with job growth helps mitigate
commute traffic, moderate housing price increases and ease
workforce shortages.
1.40
HOW ARE WE DOING?
1.30
Between 1992 and 2000, Silicon Valley was much better at creating
1.20
jobs than at creating housing. Silicon Valley produced 329,000 new
1.10
jobs but only 60,500 new housing units(1 home for every 5.5 jobs).
Within Silicon Valley, the overall ratio ofjobs to housing varies
widely by subregion. For example. North Santa Clara County has
1.00
the largest number ofjobs relative to housing (2:1). South Santa
1992
1993
1994
1995
1996
■■ JOBS
1W7
1998
1999
2000
Clara County has significandy fewer jobs relative to its housing (0:1).
In the most recent year(July 1999 to June 2000), Silicon Valley
produced an estimated 80,000 new jobs and 9,600 housing units.
Already job-rich North Santa Clara County gained 16 new jobs
for every one housing unit built. House-rich South Santa Clara
HOUSING
County gained three new jobs for each housing unit.
Recent growth in jobs exceeded housing construction in all other
RATIO OF NEW JOBS TO NEW HOUSING STARTS BY SUBREGION
subregions of the Valley as well: 6:1 in South San Mateo County;
5:1 in Central Santa Clara County; 10:1 in Southwest Alameda
County; and 8:1 in Scotts Valley.
To keep pace with job growth, the region would have had to build
160,000 additional housing units since 1992.
SOUTH
1
SANTA CLARA
COUNTY
1
OVERALL RATIO
■ NORTH SANTA CLARA COUNTY
I SCOTTS VALLEY
I CENTRAL SANTA CLARA COUNTY
I SOUTH SAN MATEO COUNTY
I SOUTHWEST ALAMEDA COUNTY
3SOUTH SANTA CLARA COUNTY
*
JULY 1999 - JUNE 2000
16:1
8:1
5:1
6:1
10:1
3:1
Sources: Construction Industry Research Boards Employment Development Department,
Department of Finance
»
REGIONAL TREND
INDICATORS
Silicon Valley Job Growth Cools
WHY IS THIS IMPORTANT?
ABSOLUTE AND PERCENTAGE CHANGE IN THE NUMBER
Annual net job gains or losses are a basic measure of economic
health. This indicator tracks employment from a unique set
of employment data tailored to cover the Silicon Valley region
(see Appendix B).
OF SILICON VALLEY JOBS FROM THE YEAR PRIOR
70,000
5.5%
60,000
\
HOW ARE WE DOING?
50,000
In 1999, Silicon Valley realized a net increase of an estimated
21,200 jobs, a 1.7% annual growth rate.
40.000
2.9%
This represents a slowing from 1998's 2.9% growth rate (36,600
jobs) and a significant departure from three years of ver\' rapid
employment growth from 1995 to 1997, In 1995, 1996 and 1997
Silicon Valley's net employment grew 5.5%,4.8% and 5.2%
respectively, adding at least 54,000 jobs each year.
30,000
2.1%
20.000
10,000
1993
1994
1995
1996
1997
1999*
1998
Source: Employment Development Department
'Estimate
Since 1992, the first year of the regional employment dataset,
Silicon Valley has seen a net increase of more than 275,000 new
jobs. The total number ofjobs in the region is 1.3 million.
This dataset does not inelude'self-employed people. Approxi
mately 15% of tax returns from the combined Santa Clara and
San Mateo County region report income from self-employment
Software Jobs Grow, Computers Constant, Semiconductors Decline
WHY IS THIS IMPORTANT?
NET CHANGE IN CLUSTER EMPLOYMENT,
SECOND QUARTER 1998 TO SECOND QUARTER 1999
This indicator shows how employment in different clusters
changed in the most recent annual period. A cluster is a concent
tration of complementary industries that generates wealth by
exporting from the region. The seven clusters tracked account
15.000 ■
10,000
5,000
for nearly 40% of all non-governmental employment in the region.
0
(5,000) ■
HOW ARE WE DOING?
(10,000) ■
Within the cluster industries, the biggest job gains remained in
(15,000) ■
software, which added 12,600 jobs between the second quarter
Software
Innovation Professional Computers/ Bioscience
Services
Services
Communi-
Defense/
SemiAerospace conductors/
cations
Equipment
NET CHANGE IN EMPLOYMENT IN OTHER INDUSTRIES,
SECOND QUARTER 1998 TO SECOND QUARTER 19.99
of 1998 and the second quarter of 1999. The second-largest
growth was in innovation services with 7,400, followed by profes
sional services with 3,100, The large computers/communica
tions cluster (114,000 total jobs) held relatively constant adding
170 jobs.
10.000
Three clusters showed net job losses. Bioscience lost 1,250 jobs,
8.000
6.000
defense/aerospace lost 5,300 jobs and serniconductors/semiconductor
4,000
equipment lost 13,400 jobs. In last year's Index, bioscience apd
1113
semiconductors/semiconductor equipment were among the top
four industry job gainers.
2,000
0
(2,000) •
(4,000) •
(6,000) ■
Construction/ Gov./
Visitots
Trans7
Industry
Education
Public Utilities
Agriculture/ Health
Resource
Extraction
Source: Employment Development Department
Services
Finance/
Insurance/
Real Estate
m
- Trade
Misc.
Mfg.
Of the other Silicon Valley industries, construction/transportation/
public utilities experienced the strongest growth, adding 9,200
jobs. Other strong performers were government/education (5,200)
and local and visitor services (4,650). Miscellaneous manufacturing
lost 5,700 jobs.
REGIONAL TREND
INDICATORS
Overall Shift From Quantitative to Qualitative Economic Growth
WHY IS THIS IMPORTANT?
ANNUAL GROWTH OF AVERAGE REAL WAGES AND JOBS
Silicon Valley 2010 called for a shift from evaluating the success of
IN SILICON VALLEY
the economy by quantitative growth—more jobs, more consump
tion of resources, more congestion—to qualitative growth—
enhanced productivity, better use of resources and jobs with
advancement potential open to more residents.
5% ■
I
■ ■■ ■I
■
■
I
■
■
This indicator Compares growth in average real wages to growth
in new jobs fOr each year from 1993 to 1999. Average real wages
is but one factor that defines job quality.
HOW ARE WE DOING?
I
In 1993-1994, the region added more than 40,000 jobs. Silicon
Valley's average wages,, however, stagnated during this period.
Although the region was gaining new jobs, it was also losing jobs
in well-paying sectors such semiconductors and defense.
1993
1994
1996
1995
^■.INCREASE IN WAGES
■
1997
1998
1999»
Through the robust growth period of 1995 to 1997, job growth was
paralleled by strong gains in the region's average real wage.
INCREASE IN JOBS
Although job growth slowed significantly in the past two years,
average real wage growth has remained strong:—4.8% in 1998
and 5.1% in 1999. This indicates qualitative economic growth
at a time when quantitative growth has slowed.
Source: Employmenl Development Department
*Estimate
^
Merchandise Exports Decline 11%; Region's Sha're of State Exports
Also Shrinks, But Software and Service Exports Are Not Counted
WHY IS THIS IMPORTANT?
SILICON VALLEY MANUFACTURING EXPORT SALES, AND SHARE
OF CALIFORNIA'S EXPORT SALES, 1998 DOLLARS
Exports generate wealth and jobs for a region and are an impor
tant indicator of global competitiveness. Serving growing global
demand for high-tech goods is key to employment and sales
growth for existing and new Silicon Valley firms.
36%
34%
HOW ARE WE DOING?
$30
In 1998, merchandise exports from Silicon Valley-based firms
declined 11% from $37.9 billion to $33.6 billion. Statewide, exports
decreased 7%. Nationally, exports declined 1%.
30%
29%
Silicon Valley companies accounted for 34% of California's nonagricultural export sales in 1998, a decrease from 36% in 1997.
$10
Part of this decline is attributable to softened demand for semi
conductors and semiconductor equipment in Asia. In addition,
much of the Valley's recent growth is being spurred by U.S.
1993
1994
.1995
1996
1997
1998
demand for Internet-related equipment and services.
Equally important, the decline reflects the fact that official govern
Source: U.S. Department of Commerce, Exporter Loeation Series
ment trade datasets do not include exports of services, including
most software. Joint Venture considers this a significant flaw that
will increasingly understate the Valley's global reach relative to
more manufacturing-intensive regions.
fifi)
Value Added per Employee Is High and Rising
WHY IS THIS IMPORTANT?
VALUE ADDED PER EMPLOYEE OVERALL
Value added is a proxy for productivity and reflects how much
economic value companies create.
S120.000
Increased valiie added is a prerequisite for increased wages. Inno
vation, process improvement and industry/produet mix drive value
added, which is derived by subtracting the costs of a company's
materials, inputs and contracted services from the revenue earned
from its products.
$100,000
$80,000
$60,000
$40,000
$20,000
HOW ARE WE DOING?
$0
1990
Overall value added per employee has inereased steadily sinee
1994 at an average annual rate of5%. Between 1998 and 1999
overall value added per employee increased 3% to $114,500.
Four clusters have value added per employee significantly above
the average. Computers/communieations had the highest value
added, at $289,000 per employee. Semiconductors/equipment
1994
1995
1996
1997
1998
1999
$300,000
$166,900, and innovation services had $139,000.
$150,000
Except for bioscience, value added by Silicon Valley clusters
is higher than the national average. This accounts for their
$100,000
national average.
1993
$250,000
$200,000
Of the other more local-serving industry seetors, wholesale trade
and finance/insurance/real estate had a higher value added per
employee than the regional average—$134,200 and $131,200
respectively. All sectors add more value than their respective
1992
VALUE ADDED PER EMPLOYEE BY CLUSTER, 1999
had the second-highest value added, at $240,800. Software had
exceptionally high wages.
1991
$50,000
$0
Computers/
Semi• Software
Communi- Conductors/
cation
Equipment
Innovation
Services
Defense/
Aerospace
SANTA CLARA COUNTY
■■
Bioscience Professional
Services
U.S.
VALUE ADDED PER EMPLOYEE BY OTHER INDUSTRY GROUPINGS, 1999
$140,000
3120,000
3100,000
380,000
360,000
340,000
320,000
Trade
Construction/
Local
Trans./
and Visitor
Public Utilities Services
■■ SANTA CLARA COUNTY
Sources: Regional Financial Associates, Collaborative Economics
1
Health
Government/
Services
Education
One New Home for Every 19 New Jobs in South San Mateo Region
WHY IS THIS IMPORTANT?
Building housing commensurate with job growth helps mitigate
RATIO OF NEW JOBS TO NEW HOUSING STARTS
BY SUB-REGION (JUNE'1998-JUNE 1999)
commute traffic, moderate housing price increases and ease
workforce shortages.
HOW ARE WE DOING?
In 1999, an estimated 7,831 housing units were built in Silicon
Valley. This number is lower than the 11,105 units built in 1998.
Multi-family housing was 49% of total starts.
In 1999, the ratio of new jobs to new housing was approximately
3 to 1, because of a slowing in job growth. Since 1992, the Silicon
Valley region has added more than 275,000 jobs and created 54,600
housing units (5 jobs for every 1 housing unit.)
m
m
Part of what causes commute traffic is the structural imbalance
in the creation ofjobs and housing within Silicon Valley's six
major subregions. Between June 1998 and June 1999, for exainple,
the southern San Mateo County region produced 19 jobs for
every one housing unit. Southwest Alameda County and South
Santa Clara County produced four jobs and three jobs for
every one housing unit. North and Central Santa Clara County
generated two jobs for every one housing unit.
A£
■■SOUTH SAN MATEO COUNTY 19:1
■■ SOUTHWEST ALAMEDA COUNTY 4:1
■■SOUTH SANTA CLARA COUNTY 3:1
ESS NORTH SANTA CLARA COUNTY 2:1
CENTRAL SANTA CLARA COUNTY 2:1
Cn^SCOTTS VALLEY 0:1
^
Sources: Construction Industry Research Board, Employment,Development Department
n-RMLTSia: 9 I 1.1 b U N VAL.LtT AND THE BAT AREA
U-
20% OF SANTA CLARA COUNTY'S WORKFORCE LIVES OUTSIDE THE COUNTY,
UP FROM 16% IN 1990
The number of workers commuting into Santa Clara County from surrounding counties increased from
144,000 in 1990 to 212,000 in 2000 — a 47% increase. The commuters'share of total employment in
Santa Clara County increased from 16% in 1990 to 20% in 2000.
Though the absolute number of commuters increased markedly, the shifts in the home counties of
the commuters were only slight. The largest shareiof commuters,48%,live east of Silicon Valley —
the same as in 1990. The share of commuters from the Peninsula and points north declined from 36%
to 32% between 1990 and 2000. The share of commuters from the west increased from 12% to 15%.
The share from San Benito and Monterey Counties increased from 4% to 5%.
'
ORIGIN AND Number of commuters into santa clara county
Source: Melropolitan Transportation Commission; Center for Urban Analysis
IMPLICATION
While Tri-Valley, Santa Cruz County and San Francisco have developed significant concentrations of
technology jobs, the greatest concentration of such jobs still remains in Silicon Valley.
Because 80% of the workforce lives in Santa Clara County, education and training of our residents
remain key to future success.
©
More Students Completing Courses for College Entrance
WHY IS THIS IMPORTANT?
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE REQUIREMENTS
Passing a breadth of core courses required for college entry is a
measure of achievement, capacity and readiness. Completing some
type of education beyond high school is increasingly important for participating in the high-wage sectors of the Silicon Valley
economy. A Joint Venture survey of the region's fastest-growing
companies found that 84% of positions require education or
llllll
20%
training beyond high school.
10%
HOW ARE WE DOING?
The share of high school students who complete the courses
required for entrance to the University of California(UC)or
California State University(CSU)systems increased from 43%
in 1997 to 47% in 1998. Silicon Valley compares very favorably
1992-93
1993-94'
1994-95
1995-96
I SANTA CLARA COUNTY
1996-97
1997-98
I CALIFORNIA
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE
REQUIREMENTS, BY ETHNICITY, 1997-98
with the state average of 33%.
70%
The number of students completing the requirements in Silicon
Valley has steadily increased since 1994 when only 36% ofstudents
met the standard.
30%
Performance, however, varies widely by ethnicity Only 23% of
Hispanic and 22% of African-American students completed these
20%
10%
courses in 1998, compared with 66% of Asian students and 47%
0%
of white students. .
Asian
White
Filipino
—
Native
Pacific
American
Islander
I I
Hispanic
African
American
— AVERAGE 47%
Source: California Department of Education
mi
INCLUSIVE SOCIETY
goal 11: TRANSPORTATION CHOICES We overcome transportation barriers to ernployment and increase mobility by investing
in an integrated, accessible regional transportation system and other alternatives to driving alone.
Transit Ridership Per Capita Shows No Change
WHY IS THIS IMPORTANT?
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA AND SAN MATEO COUNTIES, PER CAPITA
People want more choice in how they get to work, to school or
to mn errands. A greater percentage of workers using alternatives
to driving alone indicates progress in increasing access to jobs
and ih improving the livability of our communities. Pedestrian-
and transit-oriented development in neighborhoods and employment-and shopping centers increases opportunities for walking,
bicycling and using transit.
HOW ARE WE DOING?
Per capita ridership on public transportation did not change in
1999, remaining at 33.5 annual rides per person. Total ridership
1990
1991
1992
1993
1994
1995
1996
1997
1998
SHARE OF SILICON VALLEY COMMUTERS USING
increased 2%,from 80.5 million'in 1998 to more than 81 million
VARIOUS COMMUTE MODES, 1999
in 1999, but population increased at a similar rate.
Ridership increased on light rail, Caltrain and VTA buses, but
has decreased on SamTrans buses by 11% since 1994.
■ Drive Alone 79%
■ Shared Ride 15%
A 1999 survey of Valley commuters found that 79% drove to work
■ Transit 4%
alone, 15% shared a ride, 4% used transit and 1.5% walked or
13 Walk/Bike 1.5%
hiked to work. The share ofcommuters using transit has increased
from 2.8% in 1990. Carpooling^also increased from 12.4% in
1990, facilitated by a nearly complete system of high occupancy
■ Other .5%
vehicle(HOV)lanes.
25
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,,
RIDES for Bay Area Commuters
Estimate
1999*
Silicon Valley Wages.Increase 9% Over 1999
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, 2000 DOLLARS
Growth of the average annual wage in inflation-adjusted terms is
an indicator ofjob quality..It is as important a measure of Silicon
Valley's economic vitality as job growth.
$70,000
HOW ARE WE DOING?
$60,000
The estimated average wage in Silicon Valley grew 9.2% in the
year 2000, after accounting for inflation. The average wage
$50,000
increased $5,600, from $60,800 in 1999 to $66,400 in 2000.
Nationally, the increase was 2%.
$40,000
$30,000
Silicon Valley's average wage is 84% above the nation's average
wage of$36,100. The Valley's high productivity allows wages to
increase faster than the rate of inflation; tight labor markets and
$20,000
$10,000
high housing costs accelerate wage increases.
1992
.1993
1994
1995
1996
■■i SILICON VALLEY
1997
1998
1999
2000'
mm U.S.
Sources: Employment Development Department, Bureau of Labor Statistics, Economy.com
*Estimate
Cluster Wages Grow 20% Overall; Average Software Wage Reaches $125,000
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, CLUSTER INDUSTRIES, 1999
Average annual wage increases in driving cluster industries are
an indicator of the wealth-generating impact that outward-oriented
industries have on Silicon Valley. Healthy cluster industries stim
ulate local-serving mdustries, as companies and the people
they employ spend money on goods and services offered within
$140,000
$120,000
$100,000
. $80,000
the region. '
$60,000
$40,000
HOW ARE WE DOING?
$20,000
Software continues to have the highest average annual wages,
reaching $124,700 in 1999, an increase of 25% from the prior year.
$0
Software
The second-highest average wages are found in the Semiconductors/.
Equipment cluster at $117,000, followed by Computers/Commu
nications at $110,100. Wages in the Semiconductors/Equipment
cluster experienced the largest absolute change of $27,000; the
Semiconductors/
Equipment
Computers/
Communications
Bioscience
Innovation
Services
Defense/
Aerospace
Professional
Services
AVERAGE PER EMPLOYEE WAGE, OTHER INDUSTRIES, 1999
Computers/Communication cluster showed the largest percent
S70.000
increase from the previous year, 32%.
S60,000
Overall, average wages in cluster industries increased 20%; wages
850,000
840,000
in other industries increased 1%.
830.000
Among the other industries in Silicon Valley, Finance/Insurance/
Real Estate remains the highest at $60,400. The largest-employing
sector, Government/Education, has the third-lowest wages per
$20,000
$10,000
employee at $39,300.
Finance/
Insurance/
Real Estate
Trade
Misc.
Mfg.
Construction/ Health
TransV
Services
Public Utilities
Source: Employment Development Department
©
GovJ
'Education
Visitors Agriculture/
Industry Resource
Extraction
Value Added per Employee.Is Double National Average
WHY IS THIS IMPORTANT?
VALUE ADDED PER EMPLOYEE OVERALL
Value added is a proxy for productivity and reflects how much
economic value companies create.
$140,000
Increased value added is a prerequisite for increased wages.
Innovation, process improvement and industry/product mix
drive value added, which is.derived by subtracting the costs of
$120,000
a company's materials, inputs and contracted services from the
revenue earned from its products.
$60,000
$100,000
$80,000
$40,000
$20,000
HOW ARE WE DOING?
$0
1990
Since 1994, Silicon Valley has experienced rapid increases in
value added per employee, averaging 8.7% annually. Between
1999 and 2000, overall value added per employee increased 7%
to $127,100. The national average is $60,800.
Four clusters have value added per employee significantly above
the regional average. Computers/Communications had the highest
value added at $274,400 per employee. Semiconductors/Equipment
1991
1992
1993
1994
1995
SILICON VALLEY
1996
1998
1999
2000
H
VALUE ADDED PER EMPLOYEE BY CLUSTER, 2000
$300,000
$250,000
$200,000
had the second-highest value added at $254,600. Software had
$192,600, and Innovation Services had $180,200.
/
Value added by Silicon Valley clusters is higher than that of
their national counterparts. This accounts for their exceptionally
high wages.
$150,000
$100,000
$50,000
Computers/
Semi-
Communi-
conductors/
cation
Equipment
Software
Innovation Bioscience
Services
I SANTA CLARA COUNTY
Source: Economv.com
Defense/
Professional
Aerospace
Services
U.S.
INNOVATIVE
ECONOMY
GOAL 3: broadened prosperity Our economic growth results in a higher standard of living for lower-income people.
, Economic Success Is Not Raising Income for All
HOUSEHOLD INCOMES OF SANTA CLARA COUNTY RESIDENTS,
ADJUSTED TO REPRESENT A HOUSEHOLD OF FOUR, 1999 DOLLARS
$160,000 ■
S140.000 ■
WHY IS THIS IMPORTANT?
This progress measure looks at change in household income at
the top 20% and bottom 20% of the'income distribution. House
hold income includes income from wages, investments. Social
Security and welfare payments for all people in the household.
The indicator compares the income available to a representative
$120,000 ■
four-person household at identical points in the distribution over
different periods of time.
$100,000 -
$80,000 ■
HOW ARE WE DOING?
$60,000 -
Inflation-adjusted incpmes of representative,households at ±e
$40,000 ■
lowest 20th percentile of the income distribution have been rising
only since 1997. However, the 1999 income level, an estimated
$20,000 -
$40,000, is below the income level earned by the bottom 20% of
households earlier in the 1990s.
SO1993
1994
1995
1996
1997
1998
1999
■■ 20TH PERCENTILE
Ml 80TH PERCENTILE
Source: Census Bureau
INNOVATIVE
Nationally, household incomes at the 20th percentile rose :
between 1993 and 1999. In Santa Clara County, these incomes
declined an estimated 7% in inflation-adjusted terms. Inflationadjusted income of households at the 80th percentile increased
20% to an estimated $149,O0O in Silicon Valley.
ECONOMY
GOAL 4: economic opportunity All people, especially the disadvantaged, have access to training and jobs with advancement potenti;
High School Graduation Rate.Declines
WHY IS THIS important?
HIGH SCHOOL GRADUATION RATE, SILICON VALLEY
Accessing quality jobs requires not only graduating high school,
but also additional education or training. The high school gradua
tion rate is a risk indicator that warns of lost potential and future
societal costs resulting from people being un- or underemployed.
7095,
A multicultural, highly skilled workforce has unique advantages
for a globally competitive region. Providing a quality education
for all ethnic groups should be a prime objective in Silicon Valley.
5095,
5095,
4095,
HOW ARE WE DOING?
1993
1994
1995
1996
1997
1998
1999
2000
In 2000, 70.3% of the students who enrolled as freshmen in
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY, 1999, SILICON VALLEY
100%
^
80% H
public high schools in 1996 graduated as seniors. This is a decline
from the 1999 rate of 75.3%. The Silicon Valley graduation rate
was approximately two percentage points higher than the state
wide average in 1999.
11
Graduation rates vary widely by ethnicity. Asian students achieved
the highest graduation rate at 97%(1999 data). Eighty-two percent
of Filipino students and 78% of White students graduated. The
graduation rate among Hispanic studerits remained unchanged
from 1998 levels at 57%. .
Asian
Filipino
White
Pacific
Nativt
Native
African
Islander
American
American
Source: Alameda, Santa Clara, San'Mateo County Offices of Education
Hispanic
Average Wage Increased 5% in 1999
WHY IS THIS IMPORTANT?
AVERAGE PER EMPLOYEE WAGE, 1999 DOLLARS
Growth of the average annual wage in inflation-adjusted terms is
an indicator ofjob quality. It is as important a measure of Silicon
Valley's economic vitality as job growth.
$60,000 ■
HOW ARE WE DOING?
$50,000 •
In 1999 the average wage in Silicon Valley grew 5.1% after
accounting for inflation, from $51,100 to $53,700. Nationally the
$40,000 ■
increase was 3.4%.
Silicon Valley's average wage is more than 59% above the
$30,000 •
nation's ($33,700).
$20,000 ■
The Valley's high productivity allows wages to increase above the
rate of inflation.
$10,000 •
$0 ■
1992
1993 .
1994
1995
1996
imm SILICON VALLEY
1997
1998
1999»
■■ U.S.
Sources: Employment Development Department, Bureau of Labor Statistics, Regional Financial Associates
*Estimate
Average Wage for Soffware Cluster Exceeds $95,000;
Largest-Employing Sector—Local and-Visitor Services—-Remains Below $23,000
WHY IS THIS IMPORTANT?
Average annual wage increases in driving cluster industries are
an indicator of the wealth-generating impact that outward-oriented
industries have on Silicon Valley. Healthy cluster industries can
AVERAGE PER EMPLOYEE WAGE, CLUSTER INDUSTRIES, 1998
$100,000
stimulate local-serving industries, as companies and the people
$80,000
they employ spend money on goods and services offered within
the region.
$60,000
$40,000
HOW ARE WE DOING?
$20,000
Of the cluster industries, software continues to have the highest
average annual wages, reaching $95,800 in 1998. The second
Software
highest cluster is semiconductors/equipment at $86,300, followed
SemiComputers/ Innovation Bioscience
conductors/ Communi- Services
Equipment
cations
Defense/ Professional
Aerospace Services
by computer/communications at $80,200 and innovation services
at $72,300. For the second year in a row, computer/communications
demonstrated the largest absolute ($7,160) and relative (9.8%)
increase from the previous year.
Among the other industries in Silicon Valley, finance/insurance/
real estate remains the highest at $54,000, The largest employing
sector, local and visitor services, has an average annual wage
AVERAGE PER EMPLOYEE WAGE, OTHER INDUSTRIES, 1998
$60,000
$50,000
$40,000
$30,000
of $22,900,
$20,000
$10,000
Finance/
Insurance/
Real Estate
Trade
Misc. Construction/ Gov./
Health
Mfg.
Trans./ Education Services
Public Utilities
Source: Employment Development Department
Local and Agriculture/
Visitor
Resource
Services
Extraction
special Analysis: Silicon Valley's Digital Divide
By tracking a broad base of indicators that spans the economy, society and environment, the Index
identifies emerging issues facing the region. The 2000 Index reveals a growing Digital Divide in
Silicon Valley.
WHAT IS THE DIGITAL biVIDE?
^
!
.
..
^ .
The Digital Divide is about more than connecting to the Internet; it is about connecting to opportunity
in the new digital economy. Silicon Valley's Digital Divide is the gap between different communities
in workforce, education, the economy and technology.
WORKFORCE GAP: Our current supply of skilled labor does not meet the needs of the high-technology
companies that fuel our region's economy. Joint Venture's Workforce Study, which vvas released in the
spring of 1999, identified a workforce gap of 31 to 37% of the high-tech industry demand for workers
in Silicon Valley. The cost of this workforce gap to high-tech industry is'approximately $3-4 billion in
incremental hiring and opportunity costs.
WORKFORCE DEMAND OF HIGH-TECH INDUSTRY CLUSTERS
Positions Filled By:
Workforce
Gap
B Local Labor Force 63-69%
■ Commuters I6-18%
■ Outside Recruits 10-12%
B Unfilled Positions 5-7%
Sources: A.T. Kearney Workforce Initiative Survey, Santa'Clara Valley Transportation Authority,
Association of Bay Area Governments, Employment Development Department
EDUCATION GAP: On every measure of educational attainment in this year's Index, wide variation
exists by ethnicity. This is a particularly critical challenge for Silicon Valley, because low education
attainment afflicts our fastest-growing population, Hispanics, most extensively.
• Fifty-seven percent of Hispanic students graduate high school, compared with 86% of white stu
dents and 97% of Asian students.
• On average, 29% of ninth- and tenth-grade students were enrolled in Intermediate Algebra in
1999, up from 26% in 1998. Only 19% of Hispanics were enrolled.
• On average,47% of high-school students completed the course requirements for UC/CSU
entrance in 1998. Only 23% of Hispanic students met this requirement.
• Hispanics earn only 6% of engineering degrees awarded by local universities.
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY,
SILICON VALLEY, 1998
/•
1
80%
1
AfVii,
1
rniiM
Asian
Filipino
African
While
Islander
American
Sources: Alameda, Santa Clara and San Mateo County Offices of Education
©
American
Hispanic
arnClHL ARALTSIS: SILICON VALLET'» DIGITAL DIVIDE
ECONOMIC GAP: In addition to gaps in our supply of skilled labor and educational preparation, the
region faces wide income disparity among different groups. There lias been a widening income gap
during the ,1990s in Silicon Valley. While incomes of the lowest 20% of households have increased
slightly the last two years, those incomes are still below 1992 levels (see page 18).
TECHNOLOGY GAP; Access to technology varies by race and income.
In the San Francisco Bay Area, 46% of people with household incomes less than $40,000 access
the Internet compared to 81% with household,incomes more than $80,000(Bay Area Council, 1999).
T^hirty-seven percent of Hispanics in the Bay Area use a computer on a frequent basis compared
to 59% of non-Hispanic Whites (Public Policy Institute of California, 1999).
BOTH THE NEW ECONOMY AND CHANGING DEMOGRAPHICS AFFECT THE DIGITAL DIVIDE
These gaps widen as the New Economy creates new skills demands at the same time that the demo
graphics of the Valley continue to change.- As our population becomes more'diverse, special efforts
are required to ensure,that the Digital Divide does not continue to widen.
As we enter the year 2000, we cross an important demographic milestone: no racial/ethnic group is
a statistical majority. Anglos represent 49% of the combined population of Santa Clara and San Mateo
counties and only 39% of the school-aged population. Population projections point to increased diver
sity of our region as we advance toward 2010.
WE HAVE CROSSED A DEMOGRAPHIC MILESTONE
50% ■
40% •
30% ■
20% ■
10% •
1995
1996
1997
1998
1999 2000* 2001* 2002* 20O3* 2004* 2005*
WHITE %
mm NON-WHITE %
1999 SCHOOL-AGED DEMOGRAPHICS REFLECT THE NEW SILICON VALLEY
■ White 39%
■ Hispanic 31%
■ Asian and Pacific Islander 26%
□ African American 4%
,■ Native American 0.2%
Source: Department of Finance
•Projection
IMPLICATIONS FOR SILICON VALLEY
Joint Venture believes that Silicon Valley's continued economic and social vitality is dependent on
our ability to prepare more people in the region for the demands of the new workforce, whether in
high, tech or other fields. This is the challenge that will be the focus of Joint Venture's work as we
explore ways to enable all people in Silicon Valley to succeed in the new Digital Economy.
©
P
TABLE 1: Jobs Paying Less than 530,000 per year in Santa Clara County, 1999
i
Job Oeseriptlon
Mean Annual Wage
No.of People Working
s' Jobs paving less than $15,000 per vear
$
Fast Food Cooks
Dishwashers
SI Waiters and Waitresses
ally everyone else. With monthly rental costs
f."
$13,830
$14:640
$14,700
$14,750
Dining Room, Cafeteria Attendants
failed to meet even the minimal needs of virtu
1
Total
4,510
5,720
5,620
9,530
25,380
now averaging $1,900,the bidding wars that well
fe
;
paid workers wage for the limited supply of
housing continues to have a devastating infla
tionary impact on the entire Silicon Valley hous
--
:
Jobs paying $15,001 to $20,000 per year
Restaurant Host and Hostesses
$15,590
$15,650
Counter Attendants (cafeteria, coffee shop, concession) $15,870
Bartenders
$16,460
Food Preparation Workers
$17,240
Maids and Housekeeping Cleaners
$17,820
Child Care Workers
/
$18,010
Cashiers
$18,500
Janitors and Cleaners(except housekeeping)
$18,600
Hand Packers and Packagers
$18,760
Restaurant Cooks
$18,880
Hand Laborers and Freight, Stock and Material Movers $19,620
Teacher Assistants
$19,730
Teacher Assistants
$19,730
Counter and Rental Clerks
$19,750
Retail Salespersons
$20,290
Helpers-Production Workers
$20,990
1 Combined Food Preparation & Serving Workers
i
i
4
-
i
i
1
8
i
5-4
k
i
Total
2,990
22,170
5,190
2,230
4,500
4,750
1,790
19,420
20,310
7,340
4,670
20,070
6,930
6,930
2,250
22,790
2,960
157,290
^ .
ing market.
The evolution ofthe hourglass shaped economy
isn't limited to Silicon Valley. The explosive
t
growth ofhigh-tech and information technology
'
1
& industries has spawned similar polarization in
other communities nationwide. The New
I'l Economy does generate enormous wealth.How
ever, absent widespread collective bargaining
and other mediating institutions, new wealth is
"S,
concentrated in core industries and critical oc
cupations,potentially widening existing inequi
i
Jobs paying 20,001 to $25,000 per year
Security Guards
Preschool Teachers
Nursing Aides, Orderlies arid Attendants
-
i Tellers
1
1
S
Landscaping and Groundskeeping Workers
Stock Clerks and Order Fillers
Receptionists and information Clerks
tri
$20,210
$21,350
$21,600
$22,070
$24,210
$24,290
$24,340
Total
i
13,040
2,270
4,380
4,190
6,820
9,070
7,600
47,370
t Child, Family and Social Workers
1 Data Entry Keyers
Shipping and Receiving Clerks
'
1 Team Assemblers
i General Office Clerks
•
V
m
Electrical & Electronic Equipment Assemblers
Billing and Posting Clerks
inspectors. Testers, Sorters, Samplers & Weighers
Light Truck Drivers, Delivery Services
School Bus Drivers
Industrial Truck and Tractor Operators
i Phamnacy Technicians
i Bill and Account Collectors
Bus drivers, transit and intercity
Total
Table 1 illustrates the number of workers in our
region holding low-wage jobs and facing over
P whelming housing costs. How many of these
311,000 workers and their families will require
M
i Jobs paying $25,001 to $30,000 per year
1
ties.
:
:,
$25,050
$25,170
$25,100
$25,290
$25,300
$26,140
$26,590
$26,700
$27,080
$27(640
$27,970
$28,920
$29,180
$29,650
1,000
2,640 ■
8,250
11,200
15,820
18,790
5,370
7,770
5,190
3,760
2,320
affordable housing? Ifwe assume that there are
T
1.5 income eamers for afamily offour,then 20%
,
would qualify for ELI, 79% would qualify for
9 VLI, and 1% for LI. Even assuming there are
fe two low wage incomes per household, 64% of
fe"
H
the income eamers listed in the table would
u
qualify for VLI and 36% would qualify for LI*.
However, many of these households would not
fe
have two full-time income eamers with two chil
820
2,620
1,780
87,330
f
dren,given the difiSculties and cost ofarranging
Number of Jobs listed paying less than $30,000*
ii Total Number of Jobs paying less than $30,000
1 Total Number of Jobs in Santa Clara County
% of total paying less than $30,000
1
317,370
365,480
936,300
39.03%
;.
fiiU-time childcare®.
* In our estimations, each income earner provides haif of the total
••
'This figure is smaller than the courify total ofjobs paying less than $30,000 as it excludesjobs with 2000 or fewer workers.
Total jobs paying less than $30,000 are included In the total.
g
WORKING PARTNERSHIPS USA:
Policy Briefs:Silicon Valley Equity Series
s
Silicon Vallev^s
Housing Crisis
household income. In the first calculation, with 1.5 eamers, each
earner makes 75% of a low-wage salary. In the second calculation,
each salary provides half of the household Income, and each
household earner makes 100% of a low wage salary.
Source:BLS,OES Data 1999
0
With demand rapidly escalating, restrictions on and industrial development, generate the bulk
supply have also exerted enormous inflationary ofthe revenue that fills city coffers. A1999 sur
"By allowing
fiscal policy to
pressure on housing markets. Prohibitions on vey by the Public Policy Institute of California
drive land use
developing land that would otherwise be suit substantiated the effect ofthis logic, noting that
able for housing, such as San Jose's Urban the state's city managers placed far more value
Growth Boundary, may serve legitimate envi on generating new sales tax revenue thari filling
choices,city
officials make
decisions that
ronmental objectives. However,by luniting land the need for affordable housing.**
availability, they also contribute to the rise of
•By allowing fiscal policy to drive land use
choices, city officials make decisions that ap
Neighborhood opposition to new housing devel pear financially prudent, but cause lasting dam
opment is another key factor in Silicon Valley's age to the community. Some state leaders now
housing shortage.Though empirical evidence to recognize the dangers of"fiscalizing" land use,
support their worries fails to exist, homeowner but have had difficulty overcoming resistance
appear
housing pri^sl*--^
concern that the introduction ofaffordable hous
financially
prudent, but
cause lasting
damage to the
community."
by local officials to change.
ing in their neighborhoods will dirhinish prop
erty values has bolstered opposition to needed
development. This "not in my backyard"senti
ment has been a major obstacle to the expan
sion ofaffordable housing in San Jose.
1
TABLE 2: Ratio of jobs to housing
Palo Alto
Additionally, California's public finance system
works to discourage new housing development
by denying cities the tax revenues necessary to
pay for the basic services new residents require.
For example,the total amoimt ofproperty taxes
61,505
Population (i)
Number ofjobs, 2000 (2) 106,690
Housing units (3)
26,097
Santa Clara Sunnyvale San Jose
102,895
135,370
39,326
Jobs to housing ratio 4.1
3.4
1 California Department of Finance projections; January, 2001.
133,215
131,140
54,437
923,591
410,990
-287,506
2.4
2Associatibn of Bay Area Governments(ABAG)job projections.
3 California Department of Finance projections; January, 2001.
IK'i
received by the City of San Jose for FY 99-00
totaled $66,684,000. These revenues constituted
less than halfofthe police department's operat
ing budget alone $175,092,408! Given these
limitations,it's little surprise that municipalities
often regard new housing less as an asset than ** Despite the fiscal disincentives for housing cpnstruction, it is
important to note that different cities in the region vary significantly in
as a source of new expense. On the other hand, the extent to which they allow these pressures to limit their commit
sales taxes, which are generated through retail
ment to the production of affordable housing.As Table 2demonstrates,
San Jose stands out as the city with.the greatest sense of regional
responsibility towards responding to the valley's housing needs. Not
* The UGB encourages "smart-growth" strategies to address the jobshousing imbalance and related stress on our infrastructure. One such
strategy,is to build housing along transit corridors.
only Is San Jose's jobs/housing ratio much lower than those of other
cities, it also produces a higher percentage of subsidized units. Thus,
San Jose does less to cause housing price inflation and does more to
mitigate the effects of high housing costs than its neighboririg cities.
Silicon Valley^s
Housing Crisis
WORKING PARTNERSHIPS USA 1
(
1.4
|f;
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING BROADLY DEFINED
prepared by:
Susan Silveira
Springboard Consulting
HOUSING: BROADLY DEFINED
The State Picture
Three Factors are at the Heart of California's Housing Crisis
1. Housing Production has Plummeted in the 1990s
During the 1990s, California added approximately halfthe number of housing units built
in each ofthe two previous decades. Not only has housing production dropped, it has
foiled to keep pace with population and job growth. Between 1994 and 1998, California's
population increased by 4.4 percent, while the supply of housing rose by just 1.6 percent.
Production trends over the past three decades show a dramatic drop in housing
construction during the 1990s. The state's Department ofHousing and Community
Development estimates that California needs to add 1.26 million units, consisting of
703,285 units ofowner occupied housing and 561,180 units ofrental housing, between
1997 and 2003 in order to meet projected demand.'
SifiMWcant Cflp RetwMn Projected Need tor Housing
end ActH^ Pioduction
MUIl
.. ..
...
Mcua
aijaaa.
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B«,«>
In contrast,just 376,896 units ofhousing were built in the state during the past three
years. At current production levels, state oflBcials estimate that California is experiencing
a production deficit ofapproximately 100,000 units per year.^
Greatest Production Shortfall is for Multifamily Housing
Muhifomily housing accounts for the majority ofthe state's production gap, particularly
housing that is affordable to lower income families. Not only did production decline
during the 1990s, but also the balance between single and multifamily housing
production shifted significantly toward single-femily housing. During the 1980s, for
example, California added an average of91,682 units of multifomiiy housing per year, 45
^ Locked Out: California's Affwdable Housing Crisis. California Budget Project May 2000
^ Lodced Out: California's AffOTdable Housing Crisis. California Budget Project May 2000
percent ofthe new housing built. Between 1990 and 1999, the state added an average of
28,089 units per year of multifamily housing,just 25 percent oftotal housing built during
the decade and a 69 percent drop from the levels ofthe 1980s.^
MultffamUy
a PRuch SmnRer Share ef Pierluctien Durlni
the 1990c
--
^ titma
I
■b
u
■.XK4±
KV.JX
The failure of the supply of rental housing to keep pace with population growth has
caused vacancy rates to drop and rents to rise. The imbalance between supply and
demand has pushed rents higher, imposing a significant burden on low and middleincome renters. Rental unit vacancy rates in most of the state's major metropolitan areas
are fer below the national average. *
McstCcilffomla
Area* Have
L«wm Rcnld Vacancy Ratcc than lh« US
CIS
I
i
I'.'':e<
t)-«
^fl-- 4
f"
/ / ./
/y
' Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
* Locked Out: California's AfFrwdable Housing Crisis. Califcsnia Budget Project May 2000
2. The Lack of Supply is Exacerbated by a Geographic Mismatch
Between Jobs and Housing
T^ibfe 5: Job Giofvtli Ewoedo
Housmg(tMwrh m Al otthe
Sl««'«L.«««CoWlliOK 199} 09
Job growth has exceeded housing growth in nearly every part ofthe state
since the economic recovery began in earnest in 1994. The number ofnew
jobs exceeded the number ofnew housing units in all but 12, primarily
Ratio of
Joboto New
Cowtiv
HousMoiMis
Sari Frai*!©.!)
15.310 1
rural, California counties between 1994 and 1998. The state as a whole
added 3.9 jobs for each new unit of housing, more than twice the 1.5-to-l
ratio recommended by housing policy experts. The ratio ofnew jobs to
new housing exceeded 5-to-l in Los Angeles, Santa Clara, San Mateo, San
Francisco, and Inyo coimties. The housing deficit is most severe in the Bay
Area, which has led the state in economic growth. Within the nine-county
Bay Area, for example, suburban Solano County is the only county where
the ratio ofjob growth to housing growth was less than 1.5-to-l between
1994 to 1998.^
3. The Fiscalization of Land Use
I0.3-to-1
L^a.^ngeies
9,4t(H
Sa'ta Ciara
8.310-1
5.fl-lo-1
5«1fr1
i'.!
4.71(H
3.9-lo-t
Caif;iris
Hftmaitiim
?.9-to-1
RvoriiJ i
2.4101
'vertLira
2.1-tol
2 2-tO l
i'j?
t.Mol
California's system oflocal government finance limits the amount of
revenue generated by housing and encourages local communities to
C &CA'T*«ir! M
Ml ciir>IO'iMfert
C Mtlfrtinyt
aiti
fevor sales tax generating retail development over residential or other
forms ofcommercial development. The importance ofsales tax revenue in relation to
other revenue sources is generally cited as the main force driving what has become
known as the fiscalization ofland use. The added cost of paying for facilities that
were once shared across the entire community increases the cost of housing, pushing
homeownership further out ofthe reach of young families and others of modest
s'caro
evjKit:
sjjaeen
means.
Other Factors Adding To California's Housing Crisis Include:^
Housing Assistance at Federal Level Fails to Meet California's Needs
Federal support for housing has declined since the 1970s. California received fewer
federal housing assistance dollars in 1999 for each individual living below the federal
poverty level than all but one ofthe ten largest states. While the federal government
spent, on average, $286 on housing assistance for each person in poverty, California
received only $171 per person in poverty.
Demand for federally-support assistance is intense. A recent survey oftwenty local
housing authorities found 371,740 femilies were on waiting lists for Section 8 assistance,
more than three times the 104,133 femilies receiving assistance. The survey found 93,632
femilies wait listed for 25,268 units of public housing.
A significant firaction ofthe state's federally subsidized housing units are reaching the
expiration dates oftheir contracts to maintain affordability. In the past three years,
^ Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
® Excerpts frcxn Locked Out: CalifcMmia's Affordable Housing Crisis. CalifOTnia Budget Project May 2000
California has lost more than 15,000 afiFordable housing units to opt-outs and
prepayments, a total of 11 percent ofthe federally assisted inventory, with most ofthe
losses occurring in Los Angeles, Orange, San Diego, and Santa Clara Counties. The state
Department ofHousing and Community Development estimates that more than 180,000
units may be at risk ofconversion from affordable to market rents over the next decade.
State Housing Spending Lags Need
Over the last decade, California has gone from being a leader ofinnovative state housing
policy to a laggard. During the late 1980s, California implemented a series ofinnovative
housing programs and provided substantial fimding for its housing efforts. Among the
state's signature initiatives were creation ofthe first state housing trust fimd in 1985,
creation ofa state supplement to the federal low-income housing tax credit in 1987, and
passage ofthree affordable housing bonds in 1988 and 1990.
State housing spending dropped substantially during 1990s from 0.7 percent of total
spending in 1990-91 to 0.2 percent oftotal spending in 1999-00. During the early 1990s,
bond proceeds supported a substantial investment in affordable housing. However, as
these fimds disappeared only minimal state support was allocated to take their place.
While the 1999-00 budget include several modest initiatives, the absolute number of
dollars allocated to housing and related programs is less than halfthat of a decade ago.
The 2000-01 Budget marked a reversal in that trend, with the largest ever allocation of
state support for housing. Spending proposed in the Governor's 2001-02 Budget brings
spending for housing back to its 1991-92 level, which is still significantly below 1990-91.
Housing spending peaked in 1990-91 as the state spent fimds authorized by a series of
bond measures in the late 1980s.
SUb HomiFii Expondiuiw C^hng Up <o DKade OM UmiIs
.
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JM«4r
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a booming economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent ofCalifornia households owned their own homes in 1999,
compared to 66.8 percent for the nation as a whole.
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent of households could afford to purchase the median priced
home in 1999, as con^ared to 37 percent ofCalifornia households. The median
California household earns less than two-thirds the income needed to purchase the
n^dian priced home.
Housing Affoidabiity in CatiloinUis Well BelowtheN^wnalAveidge
I
."TV
21V.
iMn
i«si
isah
'imj
16«2
H oitting AffordabiIiiy Varies Wid ely Across C afHorn I a
7C<» T
£C^ • •
^ ^ ^ ^^ ^
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41%
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The National Association of Home Builders found that eight of the nation's ten least
affordable housing markets in the fourth quarter of 1999, and 14 of the top 25, were in
California. Overall, these 14 markets accounted for more than two-thirds (72 percent) of
the state's total population. The least affordable markets include virtually all of
California's coastal metropolitan areas from Santa Rosa to San Diego. Surprisingly, the
Stockton-Lodi metropolitan area also was included among the 25 least affordable
metropolitan areas. The Merced, Chico, Sacramento, and Yolo metropolitan areas also
ranked among the nation's 50 least affordable areas.
F«Mrer Cailforiila Harms ore AffAidoble to Median Income Heoseholde
<>«>m
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.w
srt
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Lua (.tea:
SI'S.
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ai<aai>.c
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aas
California Spends Less on Housing than Other Major States
Califomia's commitment to affordable housing is substantially less than many other states,
in both absolute terms and as a share oftotal state spending.
■ California is one of33 states >^th housing trust funds. Califomia's fund receives a $2
million per year allocation from the proceeds ofoil lease payments on state tidelands,
less than the initial $5 million allocation made in the mid-1980s.
■
Overall, California allocated $109.6 million for housing programs in 1999-00, including
$40 million in limited term ^sistance to the School Facilities Fees Assistance program
and $33.5 million in Low Income and Farmworker Housing Tax Credits. Other states
with much smaller populations spent significantly more:
o • Florida. WWi less than halfthe population ofCalifornia, Florida allocated
$149 million for housing programs for low and moderate income frmilies in
1999-00. The primary source ofsupport for Florida's housing programs
comes from a documentmy stamp tax levied on real estate transfers. This tax
provides an ongoing source ofsupport for Florida's housing trust fimd,
including $146 million in 1999-00.
o • Massachusetts. In 1998-99, Massachusetts allocated $187 million for
housing. Major program initiatives include $31 million in state support for
public housing authorities, $39 million for rental assistance programs, and
$7Tmillion for capital investments.
o • Illinois. Illinois supports its housing trust fimd with a dedicated real estate
transfer tax. The tax raised $21 million in 1998; a sum that exceeds
Califomia's support for similar programs targeted at low and moderate
income fonulies.
o • Washington. With a population one-sixth as large as Califomia's,
Washington state's housing spending is comparable to that of California. The
centerpiece ofthe state's ejqpenditures is a housing trust fimd supported by a
combination ofdedicated revenues and appropriations from the state's
capital budget. The fimd provided $62 million in support for housing
constmction and preservation programs dumg the state's 1999-00 biennium,
plus $5 million for homeless feinilies and $8 million for farmworker
housing.
o • New Jersey. New Jersey allocated $48 million in state support for housing
programs in 1999-00. Ofthis amount,$29 million comes from a dedicated
real estate transfer tax that provides an ongoing source offimding for the
state's affordable housing programs.
o • Oregon. Oregon, with a population of3.3 million, allocates interest eamed
on renters' security deposits to a trast fimd used to support low income rental
housing. In 1997-98,the fimd received $4.5 million, approximately equal to
Califomia's multifemily housing spending in the current budget year.
Support Provided Through the Tax Code Favors Higher Income Households
The vast majority ofpublic support for housing, at both the state and federal levels,
comes in the form oftax deductions for mortgage interest and property taxes and
preferential treatment of gains realized when a home is sold. By allowing ta3q)ayers to
deduct the interest they pay on the money borrowed to purchase a home and property
taxes paid, the tax code reduces the after-tax cost ofhousing. Not only do these
deductions provide substantial assistance for those who own their own homes,they
provide more fevorable treatment for investments in homeownership relative to other
types ofinvestments.
Regulatory constraints
Raising the Roof: California Housing Development Projections and Constraints 19972020. a report prepared by the California Department ofHousing and Community
Development in May 2000 makes the^ observations about regulatory constraints.
■
Local Regulation is Kev: Califomia has ample supplies ofenvironmentally
appropriate land to accommodated projected housing growth. Whether
developers and homebuilders will be allowed to access that land will depend on
whether adequate amounts ofit are designated for residential development, and
how the development approvals process is administered in California's 535
governments.
■
■
Nation's Most Complicated Development Process: California's development
process involves more review steps, and more potential discretion in those steps,
than that ofany other state.
Trends since the Earlv 1970s: Two trends have shaped the development review
process in Califomia since the early 1970s.The first is a trend away from longterm comprehensive planning approaches and toward short-term, impact
assessment/development management approaches. The second is a trend toward
■
increased local discretion in development decision-making.
Local Process 'Anti-Housing': The effect ofthese changes was to make the local
development review process in Califomia anti-housing. CEQA provided an openended vehicle for individuals and groups opposed to growth-ofwhich housing is
the prevalent manifestation-to increase the risks and costs inherent in the
approvals process, and to shift those increased risks and costs entirely to project
sponsors. CEQA also established the current practice ofreducing project
densities, and thus indirectly total production, as a means ofgaining project
approval; Proposition 13 encouraged the practice now known as "fiscal zoning"
by which cities encourage the development ofrevenue-rich land uses such as
shopping centers, and discourage the development ofservice-intensive land uses
like housing.
Santa Clara County
High Cost ofHousing
Silicon Valley housing prices are among the highest in the United States. An average
single-family home cost $617,000 as ofMay 2000, an increase of87 percent from just
five years ago when the average house cost $329,000.' The average price ofa single
family home increased by 31 percent between May 1999 and May 2000.^
According to recent data from the California Association ofRealtors, the median price of
a home in Santa Clara County in May 2001 was $532,500, almost one percent more than
the median price of$528,000 from a year ago. Sales in Santa Clara County increased by
.5% between April and May ofthis year but have dropped 38.9% over the past year.
"After nearly a year and a half ofdouble-digit increases, the median price ofa home in
the San Francisco Bay Area rose only 3.4 percent in May(2001)compared to a year
ago," said Leslie Appleton-Young, C.A. R.'s(California Association ofRealtors) vicepresident and chiefeconomist."While there's stiU robust demand for entry and mid-level
homes, the upper end ofthe market is definitely feeling the impact ofthe volatile tech
economy in the Silicon Valley. That said, a median-priced home in the Silicon Valley is
still over a half-million dollars."
The percent ofhouseholds that can afford a median priced home in California fell from
36 percent to 30 percent between 1999 and 2000. In the Bay Area that percentage fell
from 24 percent to 16 percent. Nation-wide, a httle over 50 percent ofhouseholds can
afford to buy a median -priced house in their area.®
Housing Stock
Single-family homes make up almost two-thirds ofthe Silicon Valley's housing stock.
Negative Impacts
A recent suiwey conducted by the Santa Clara County Planning Office reveals that one of
the most negative impacts ofhigh housing costs is the deterioration ofthe county's social
infrastructure." Not only are teachers, police officers and firefighters finding it difficult
to afford living in this county, nurses, doctors, other health care providers, clergy, bus
drivers, day care workers, retail sales clerks, restaurant staffi maintenance stafi^ nursing
home staff school crossing guards, government enployees, school principals and many
others are moving out ofor unable to afford to move into this coimty."
^ Silicon Valley Projections 2000, Silicon Valley Manufecturing Group
* Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
'
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
""Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1,2001
"Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1, 2001
It may be this steady erosion ofour county's infrastructure that most threatens Santa
Clara County's future, because it adversely affects virtually all ofthe fundamental
systems that contribute to our quality oflife. It affects the quality ofom education
system, our health care system, our emergency services, our transportation system, our
local government services, and ultimately the health ofour new economy.
Fiscalization ofLand Use
Revenues for Silicon Valley cities are catching up with population and employment
growth,though revenue sources have shifted away from sales and property tax.''^
What do experts predict about the housing market?
"It feels to me like the market has crested." Brad Inman, CEO,HomeGain quoted in San
Francisco Magazine, November 2000
"As long as salaries go up and some home buyers can pay cash for homes, prices will go
up"Ira Serkes, coauthor ofHow to Buv a House in California, quoted in San Francisco
Magazine, November 2000
"Once jobs begin leaving, home prices will moderate." Leslie Appleton-Young, Chief
Economist, Califomia Association ofRealtors, quoted in San Francisco magazine,
November 2000
Density
Last year Silicon Valley cities approved new residential development at an average of13
units per acre, compared with 10.3 units per acre in 1999.'^
Land Use
In 2000,24% ofSilicon Valley and its perimeter were permanently protected open spacethe same as in 1999.'^
With appropriate reserves being maintained, Los Angeles, Orange and Santa Clara
counties will lack sufBcient vacant suburban land to accommodate projected household
growth through 2010.
The total land supply currently identified in Silicon Valley as having potential for
housing production totals 10,600 acres. Based on current local policy and market '
conditions, this land supply could yield over 74,300 new homes. However,this fells well
below projected demand, based on current employment growth projections. The gap
between potential supply and projected demand could be greatly reduced by both
""Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
OfiBce June 1,2001
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2001 Index ofSilicon Valley
""Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept ofEconomics, Califomia State University, Fullerton April 2001
10
increasing land supply and the number ofhomes built per acre. The current projected
supply ofnew homes in Silicon Valley only meets 50-66 percent ofprojected demand.
Just by increasing the number ofhomes built per acre from the current projected average
ofseven to nine per vacant acre and from 12 to 25 homes per reuse acre, the region could
meet 75-99 percent ofdemand.'^
Approximately 40 percent ofpotential futxire housing development in Silicon Valley will
be on land that is ciuxently imderutilized, rather than vacant.
Halfofthe cities in the Silicon Valley already estimate that reuse sites will provide more
opportunities for new home construction than vacant sites. These cities include San Jose,
Milpitas, most ofthe large cities in northwest Santa Clara Coimty(including Cimertino,
Palo Alto and Sunnyvale), and all ofthe cities in southern San Mateo County.
Planners in most Silicon Valley communities acknowledge that they have not done a
comprehensive survey ofpotential reuse sites, and that the potential number ofnew
homes that could be built on these types ofsites will increase significantly beyond current
e^imates ifcities take better advantage ofreuse opportunities.^'
As of1996, Santa Clara Coimty had 297,576 acres ofpotentially developable land.^^
From 1985 tp^l995, Santa Clara County redeveloped and reused 7,190 acres ofland,
5,780 acres for residential uses(80.4 %).^^
Housing Production
In Santa Clara County, housing construction and rehabilitation, as measured by issuance
ofresidential permits, sponsored by the various redevelopment agencies within the
County, created 11,600 units ofhousing(8380-new, 3,220-rehab)from 1988-1996.^''
Substandard Housing
In Santa Clara's Turban County(Cities ofCampbell, Cupertino,Los Altos, Los Altos
Hills, Los Gatos, Monte Sereno, Saratoga and unincorporated areas)34% ofall
ownership households(based on 1990 census figures)required some form of
rehabilitation.^^
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prq)ared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Ibid.
^ Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manu&cturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Comnninities: Housmg Solutions fOT Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt AUiance by Strategic Economics,November 1999
^ Raising the Ro'of: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousmg and Community Development May 2000
^ Raising the Roof: California Housing Development Proiections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
Rising the Roof: California Housing Development ftoiections and Constraints 1997-2020, California
Department ofHousing and Community Development May 2000
Santa Clara County Consolidated Plan for the period 2000-2005, May 2000
11
Substandard or inadequate housing poses a health and safety threat to its occupants,
especially children. Potential risks include: asthma and other respiratory and chronic
diseases, increasing the risk ofinjury, the likelihood ofbecoming homeless and a myriad
ofother problems including more exposure to violence.^^
Jobs/Housing Imbalance
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s.^' ABAG reports for 1995-2000 an average coimtywide ratio ofnew jobs to new
housing units of6 to 1, vwth the five highest being in Santa Clara, Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
countywide ratio ofnew jobs to new housing units of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara,Palo Alto and Moimtain View.^®
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo County produced 0.7jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^^
More than 70 percent ofSilicon Valley's total employment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos HUls, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^®
Over the next 20 years(2000-2020)between 66 and 72 percent ofhousing demand will
be in San Jose/Milpitas and northwest Santa Clara County,the same areas projected to
capture approximately 67 percent ofSilicon Valley's total new job growth.^'
More than 70 percent ofSilicon Valley's total employment growth from 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
The most severe jobs/housing imbalances are in northwest Santa Clara County, where
several large employers are located, and in Scotts Valley, which has two major employers
and a small residential population. These areas are not unique. The ratio ofjobs to
"Not Safe At Home: How America's Housing Crisis Threatens the Health ofIts Children"the Doc4Kids
Project, Boston Medical Center, Feb. 1998
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
ABAG Projections 2000
ABAG Projections 2000
ABAG Projections 2000
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manu&cturing Group and Greenbelt Alliance by Strategic Economics,November 1999
12
employed residents is increasing in Silicon Valley and is likely to continue over the next
tenyears.^^
Overall employinent in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000jobs, including
replacement for the 22,000jobs the region is estimated to have lost between 1990 and
1995. Over one-halfofalljobs add^ in the region from 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in silicon Valley indicate that the incredible job growth currently being e^qjerienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
mbre between 2010 and 2020,down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
Factors Contributing to Housing/Jobs Imbalance
The imbalance is due in large part to outside factors that are shaping the zoning and
density decisions ofarea cities. Three ofthose fectors are ofparticular significance.
1. The first is what is called the "fiscalization ofland use". Since the passage of ,
Proposition 13 in 1978, city services funded by property tax revenues such as
street repair and park maintenance, have been severely constrained. Commercial
development now looks more attractive than residential. Not only do commercial
developments require fewer city services, they oftpn generate sales tax revenues
that can be used to fund local services.^^
2. A second fector is the differing expectations people have regarding commercial
and residential development. Because ofthe demand for more office space and
because it is difficult for cities to say no to more jobs for their residents, it is often
easier to win approval ofcommercial developments.^^
3. The third fector is community opposition to higher residential densities. To
achieve greater parity between the number ofjobs and homes, cities could build
housing more compactly. But public perception ofhigher density housing is
generally negative due to aspiration ofthe "American Dream"for single- femUy
home and real or perceived filings ofolder high-density developments.
Consequeritly, most local policies call for lower density development and
discourage attached multi-story housii^.^'
Population Growth
ABAG population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow down. Overall, the Valley's population is projected to increase by about 1f percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010, and 3.6 percent growth between 2010-2020. The cities
Silicon Vall^ftojections 2000, Silicon Valley Manu&cturing Group
^ Building Sustainablei Communities: Housing Solutions for Silicon Valley. Prepared for the Silic<Hi
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Silicon Valley Projections 2000, Silicon Valley Manu&cturing Group
Silicon Valley Projections 2000, Silicon Valley Manufecturing GrOup
Silicon Valley Projections 2000, Silicon Valley Manufecturing Gro
13
e}q)ected to experience the most dramatic population increases between 2000 and 2020
are Morgan Hill(30 percent) and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda Coimty.^®
Based on Census 2000 data, overall population growth in Santa Clara County was 12.4%.
Morgan Hill(40.2%), Gilroy(31.7%, Cupertino (25.5%), Milpitas(23.7%)and San
Jose(14.4%) were the top five highest growth areas.''®
Current county population projections show that Santa Clara County's overall population
over the next 20 years will increase by 3%,adding close to 54 million more residents.'"
Strategies for Solutions
In November 1999,the Silicon Valley Manufacturing Group and Greenbelt Alliance
joined forces to produce "Building Sustainable Communities: Housing Solutions for
Silicon Valley". In that report they make the following recommendations:
1. Silicon Valley cities should systematically identify underutilized sites that can be
redeveloped with new homes.
2. Even relatively small increases in the number of homes that can be built per acre
will have a dramatic impact on the overall level ofhousing supply in Silicon
Valley.
3. Supplemental Action Items:
a. Cities should make an explicit commitment to good design and promote
' design principles that result in developments that both fit into their
surroundings and support existing neighborhoods.
b. Cities should educate citizens about community issues as part ofa process
for making choices about the fiiture.
c. Many ofthe barriers to creating more housing can only be removed if
cities work together.
The California Department of Housing and Community Development suggests:
One way to bring overall housing prices down would be through a significant increase in
the housing supply, primarily through well-planned, infill development designed to create
livable, transit-and pedestrian-oriented neighborhoods(notjust individual, isolated
housing developments). T be truly affordable, much ofthe housing in such developments
must be ofhigher density. The increase in suppfy must be sufficient not only to help
overcome existing shortages but also to keep pace with new jobs that are created in this
country.''^ Excluding land that is wetland, prime and unique fermland,flood-zone, and
Building Sxistainable Communities: Hoxising Solutions for Silicon Valley. Prepared for the Silicon
Vall^ Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
California Department, ofFinance, Research Demographic Unit, California State Census Data Center,
Census 2000
California Department, ofFinance, Research Demographic Unit, California State Census Data Center,
Census 2000
Interim Count Population Projections, California Department ofFinance Demographic Research Unit
June 2001
"Eroding Our Social Infrastructure" a background report prepared by the Santa Clara County Planning
Office June 1, 2001
14
areas most suitable to large number ofendangered species and assuming a marginal
density of5.3 households per acre(15.8 persons), Santa Clara could meet 127% ofits
housing need.'^^
Raising the Roof: California Housing Development Projections and Constraints 1997-2020, California
Department ofHousing and Commimity Development May 2000
15
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING BROADLY DEFINED:
SUPPLEMENTAL MATERIALS
LIVABLE
ENVIRONMENT
GOAL 6: PRESERVE OPEN SPACE We increase the amount of permanently protected open space, publicly accessible parks and green space.
24% of Valley and Perimeter Is Permanently Protected Open Space
WHY IS THIS IMP0RTANT7
PROTECTED OPEN SPACE IN SILICON VALLEY AND PERIMETER
Preserving open space protects natural habitats, provides recre
ational opportunities, focuses development and safeguards the
visual appeal of our region.
This indicator tracks lands permanently protected through pub
lic ownership or conservation easements in Silicon Valley and its
perimeter. •
HOW ARE WE DOING?
In 2000, 24% of Silicon Valley and its perimeter was permanently
protected open space. This includes roughly 465,000 acres in
Santa Clara, San Mateo and Santa Cruz counties and Alameda
1#
ANTA
County south of Oakland.
ARA
Fifiy-seven percent of this permanently protected open space
is accessible to the public. Within these publicly accessible lands
are 645 miles of trails for hiking, biking and horseback riding.
lA
Si
1S31 PERMANENTLY PROTECTED OPEN SPACE LANDS
Source: Greenlnfo Network
LIVABLE ENVIRONMENT
i'131 .i
,T
goal 7: EFFICIENT LAND REUSE Most residential and commercial growth happens through recycling land and buildings in
developed areas. We grow inward, not outward, maintaining a distinct edge between developed land and open space.
Efficiency of Land Used for Housing Increases
AVERAGE UNITS PER ACRE OF NEW RESIDENTIAL DEVELOPMENT,
WHY IS THIS IMPORTANT?
By directing growth to already developed areas, local jurisdictions
can reinvest in existing neighborhoods, use transportation systems
more efficiently and preserve nearby rural settings.
SILICON VALLEY
■
1?
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that new housing devel
opments are using scarce land resources more efficiently. During
2000, Silicon Valley cities approved new residential developments
at an average of 13 units per acre. This compares to an overall
regional ratio of 4.9 housing units per acre.
10
b:
a
"
fl
as .
u
Bm
_
The 2000 figures are a significant increase from the prior two years
— 10.3 units per acre in 1999 and 6.6 units per acre in 1998.
Urban service areas expand when cities annex land and provide
infrastructure services such as water, sewer and roads. In 2000,
1998
1999
2000
Source: Valley Transportation Authority, Congestion Management Program:
City Planning Departments
Silicon Valley's urban service area expanded by 234 acres within
the City of Morgan Hill.
GOAL 6: preserve open space We increase the amount of permanently protected open space, publicly accessible parks and green space.
Permanently Protected Open Space in Silicon Valley
and Surrounding Area Increases
WHY IS THIS IMPORTANT?
Preserving open space protects natural habitats, provides recre
ational opportunities, focuses development and safeguards the
PROTECTED OPEN SPACE IN SILICON VALLEY AND PERIMETER
visual appeal of our region.
This indicator tracks lands permanently protected through pub
lic ownership or conservation easements. This is the second year
that open space data have been collected for Silicon Valley and
a.
ME
its perimeter.
HOW ARE WE DOING?
In 1999, 25% of Silicon Valley and its perimeter was permanently
protected open space, up from 23% in 1998. This includes
473,717 acres in Santa Clara, San Mateo and Santa Cruz counties,
and Alameda County south of Oakland.
3-
TA
Fifty-six percent of this permanently protected open space is
accessible to the public (266,334 acres.)
The largest single open space acquisition in 1999 was the Tmst
for Public Land's purchase of 10,400 acres of Coast Dairy. The
second largest acquisition was made by the new Santa Clara Valley
Open Space Authority and The Nature Conservancy purchasing
8,482 acres of Lakeview Meadows. The Peninsula Open Space
3^
Trast also made major purchases of open space in 1999, including
Rancho Canada De Oro.
1^1 PERMANENTLY PROTECTED OPEN SPACE LANDS/1998-23% OF AREA; 1999-25%
Source: Greenlnfo Network
LIVABLE
ENVIRONMENT
® QAL 7: EFFICIENT LAND RE-USE Most residential and coinmercial growth happens through recycling land and buildings in
developed areas. We grow inward, not outward, maintaining a distinct edge between developed land and open space.
Efficiency of Land Used for Housing Increases
WHY IS THIS IMPORTANT?
Directing growth into already developed areas provides more
AVERAGE UNITS PER ACRE OF NEW RESIDENTIAL DEVELOPMENT,
SILICON VALLEY
efficient use of land and infrastructure resources than does
sprawling into green areas and building more infrastructure. By
directing growth to already developed areas, local jurisdictions
can reinvest in existing neighborhoods, develop more efficient
transportation systems and preserve nearby rural settings.
12 ■
10 ■
HOW ARE WE DOING?
A survey of 26 Silicon Valley cities found that scarce land resources
are being used more efficiently for housing. During 1999, Silicon
Valley"cities approved new residential developments at an average
of 10.3 units per acre. In 1998, the average of new residential
development was 6.6 units per acre. This compares to an overall
regional ratio of 4.9 housing units per acre.
Urban service areas expand when cities annex land and provide
infrastructure'services such as water, sewer and roads. In 1999,
Silicon Valley's urban service area did not expand.
1998
1999
Source: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 8: LIVABLE COMMUNITIES We creace vibrant communities where housing, employment, places of worship, parks and services
are located together, and are all linked by transit and other alternatives to driving alone.
37% of New Housing, 32% of New Jobs Are Located Near Transit
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
stations and major bus corridors reinforces the creation of
compact, walkable communities linked by transit. This helps
to reduce traffic congestion on Silicon'Valley freeways.
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that 37% of all new '
40% ■
housing units approved in 2000 were located within one-quarter
mile of a rail station or major bus corridor. Thirty-two percent of
30% ■
new commercial/industrial developments were also located within
one-quarter mile of transit, representing 15,700 potential new jobs.
20% •
Approvals near transit declined from the previous year when
57% of new housing units and 35% of new jobs were located
near transit.
1998
2000
1999
I PERCENT OF HOUSING UNITS
I PERCENT OF JOBS
NEAR TRANSIT
NEAR TRANSIT
Source: Valley Transportation Authority, Congestion Management Program;
City Planning Departments
LIVABLE
ENVIRONMENT
GOAL 9: housing choices We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
Approvals for New Housing Fall by 50%; 1,600 New "Affordable" Units Approved
WHY IS THIS IMPORTANT?
TOTAL NEW HOUSING UNITS APPROVED, INCLUDING
NEW AFFORDABLE HOUSING UNITS, SILICON VALLEY
Our economy and community life depend on a broad range of
jobs. Building housing that is affordable,to lower- and moderateincome households provides access to opportunity and maintains
balance in our communities. This indicator measures housing units
approved for development by Silicon Valley cities in each fiscal
year; this is a more "upstream" measure than actual housing starts.
14,000 ■
12,000 -
10,000 ■
HOW ARE WE DOING? .
8,000 ■
The number of new housing units approved for development by
Silicon Valley cities fell by more than'50%, from 12,060 in fiscal
year 1999 to 5,370 in fiscal year 2000.
Despite this overall decrease, the number of new affordable
housing units approved remained around 1,600. This number
6,000 4,000 ■
2,000 -
represents 31% of total net new housing units approved.
Affordable rental housing is for households making up to 60%
of the median income. These units are primarily developed by
nonprofit housing developers or units set aside as "affordable"
in market-rate developments.
1998
1999
I NEW HOUSING UNITS
Source: CUy Planning Departments
2000
I AFFORDABLE UNITS
GOAL 11: TRANSPORTATION CHOICES We overcome transportation barriers to employment and increase mobility by investing
in an integrated, accessible regional transportation system.
Per Capita Transit Ridership Shows Improvement
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA AND SAN MATEO COUNTIES, PER CAPITA
WHY IS THIS IMPORTANT?
A larger share of workers using alternatives to driving alone
indicates progress in increasing access to jobs and in improving
the livability of our communities. Pedestrian- and transit-oriented
development in neighborhoods and employment and shopping
centers increases opportunities for walking, bicycling and using
public transportation instead of driving.
HOW ARE WE DOING?
1990
1991
1992
1993
1994
1995
1996
1997
1998
SHARE OF SILICON VALLEY COMMUTERS USING
VARIOUS COMMUTE MODES, 2000
B Drive Alone 78%
B Share Ride 15%
B Use Transit 4%
B Walk/Bike 2%
B Other 1%
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,
RIDES for Bay Area Commuters
'Estimate
1999
2C00»
Per capita transit ridership improved in 2000, increasing from
33.3 annual rides per person in 1999 to 34.3 in 2000. Total rider
ship increased 4%,from 81 million in 1999 to 84.6 million in
2000. Ridership increased on Caltrain, Light Rail and SamsTrans
bus service, but decreased slightly on VTA buses.
Not counted in the above per capita,data is ridership on the
i^tamont Commuter Express(ACE). Train service from Stockton
to San Jose started in October 1998. As of November 2000, ACE
carries 2,100 westbound passengers daily.
A year 2000 survey of Valley commuters found that 78% drove to
work alone, a 1% improvement since 1999. Two percent walked
and biked, up from 1.5% in 1998. The share of commuters carpooling and using transit remained constant at 15% and 4%,
respectively.
12% of Households Can Access Major Job Center by Transit in 45 Minutes
WHY IS THIS IMPORTANT?
AREAS WITHIN 45 MINUTE COMMUTE BY TRANSIT
The ability to access major job centers in Silicon Valley by transit
is important for decreasing congestion and for connecting all people,
including the working poor, to quality job opportunities. Regions
TO MAJOR JOB CENTER
increase opportunities for all workers to access quality jobs by invest
ing in transit and by locating workplaces and housing close to transit.
This new measure of transit accessibility indicates the percentage
of all Santa Clara County households that can access a major
employment center within a 45-minute transit commute. There
are 12 major employment centers in Santa Clara County. This
indicator focuses on the Great America Parkway employment
center located in the triangle between Highways 101, 237 and
880. The center was selected because of its concentration of
high-tech workplaces and because its suburban location makes
it representative of similar employment centers in the region.
HOW ARE WE DOING?
Twelve percent of households in Santa Clara County could access
the Great America Parkway employment center within a 45-minute
commute by transit.
f
Since 80% of all households in the County are within a 1/4 mile
of some type of transit stop, most househoids could reach this
employment center by transit, but it would take longer than
45 minutes.
ESa GREAT AMERICA PARKWAY JOB CENTER
Ml AREAS WITHIN 45 MINUTE COMMUTE BY TRANSIT
Source: Valley Transportation Authority, Congestion Management Program
30% of Valley's Freeway Miles Receive Worst Rating
WHY IS THIS IMPORTANT?
Traffic congestion is a key factor affecting quality of life. Traffic
congestion is a function of overall economic activity and regional
design — the location ofjobs and housing and the availability of
other travel options, such as public transit, carpooling, biking,
walking and telecommuting.
This indicator shows the number and share of freeway miles
operating at service level "F" during the afternoon peak travel
time. Level "F" is the worst possible rating and means forcedflow traffic with travel speeds of less than 35 miles per hour.
35%
30%
25%
20%
15%
HOW ARE WE DOING?
In 2000, 30% of total freeway miles in Santa Clara County
received the worst possible congestion rating. In 1991, only 15%
of freeway miles were given a rating of F. Congestion dropped
significantly in 1995 because of an increase in freeway capacity,
10%
1991
1994/95
1996
1997
including high-occupancy vehicle(HOV)lanes, but has increased
ever since.
Source: Valley Transportation Authority, Congestion Management Program
1998
2000
LIVABLE
ENVIRONMENT
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located,together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
WHY IS THIS IMPORTANT?
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
Focusing new economic and housing development near rail
stations and major bus corridors reinforces the creation ofcompact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
HOW ARE WE DOING?
Silicon Valley cities are.approving more residential and commercial/
industrial development near rail stations and along major bus
corridors.
30% ■
In.1999,57% of all new housing units approved by Valley cities
were on property within one-quarter mile ofa rail station or major
10% ■
Percent of New Housing Units
Near Transit
Percent of New Jobs
- Near Transit
bus corridor. Thirty-five percent of new commercial/industrial
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit.
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
14,000-
WHY IS THIS IMPORTANT?
Our economy and community life depend oii a broad range of
jobs. Building housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
in our communities.
12,000 ■
HOW ARE WE DOING?
10,000 ■
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
8,000 ■
6,000-
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
4,000 -
the 10,600 units approved were affordable.
2,000 ■
0-
1998
I NEW HOUSING UNITS
1999
I AFEORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households onrthe Santa Clara County Housing Authority's
waiting list for affordable housing.
LIVABLE
ENVIRONMENT
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
stations and maj'or bus corridors reinforces the creation of compact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
ennr.
HOW ARE WE DOING?
Silicon Valley cities are approving more residential and commercial/
industrial development near rail stations and along major bus
corridors.
30% ■
In 1999, 57% of all new housing units approved by Valley cities
20% ■
were on property within one-quarter mile of a rail station or major
10% -
Percent of New Housing Units
Near Transit
Percent of New Jobs
. Near Transit
bus corridor. Thirty-five percent of new commercial/industrial
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit.
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
14,000 ■
WHY IS THIS IMPORTANT?
Our economy and community life depend on a broad range of
jobs. Buildirig housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
in our communities.
12,000 ■
HOW ARE WE DOING?
10,000 -
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
8,000 -
6,000 -
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
the 10,600 units approved were affordable.
4,000 -
2,000 -
0-
1998
I NEW HOUSING UNITS
1999
I AFFORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households on the Santa Clara County Housing Authority's
waiting list for affordable-housing.
GOAL 16:. transcending boundaries Local communities and regional authorities coordinate^their transportation and land
use planning for the benefit of everyone. City, county and regional plans, when viewed together, add up to a sustainable region.
;i
Permit Streamlining Sets Stage for More Regional Collaboration
WHY IS THIS IMPORTANT?
Collaboration across government jurisdictions in Silicon Valley
requires developing innovative approaches to sharing information,
setting mutually beneficial goals and progressing together. This
indicator tells the story of how local jurisdictions have collaborated
to upgrade, standardize and link new approaches to permitting.
This experience sets the stage for future collaboration in areas
such as land use and infrastructure planning and management.
90%
80%
60%
HOW ARE WE DOING?
A survey of 18 Silicon Valley cities found that 80% continue to use
the standardized Unifofrn Building Code amendments that were
developed during the mid 1990s jointly by municipal building
officials and the Joint Venture Regulatory Streamlining Council,
and that 45% use the recently developed standardized building
permit form. Sixty percent of local cities are participating directly
or indirectly in the Joint Venture Smart Permit Project with 45%
already offering web-based permitting.(Web-based services include
application submissions, payments, status tracking, information
10%.
Use Uniform
Participate
Use Standardized
Olfers Web-Based
Has Geographic
Building Code
in Smart Permit
Building Permit
Permitting
Information
Standard
Project
Form
Amendments
Source: Silicon Vallev Cities
sharing and citizen response.)
Ninety percent of cities have or are developing a Geographic
Information System for land use and infrastructure planning,
infrastructure management, public safety and other municipal
services. The next challenge will be to use the lessons from
the Smart Permit Project to ensure that municipal GIS data
is available for regional analysis and information sharing.
The 18 cities that participated in the survey include 84% of.
the Valley's population.
20%
'
Svstem
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY Valley cities, counties and Other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
Government Revenue and Capital Expenditures Catching Up with Economic Growth;
, Revenue Sources Shift
GROWTH OF REVENUES AND CAPITAL EXPENDITURES OF SILICON VALLEY'S
CITIES COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
WHY IS THIS IMPORTANT?
To maintain service levels, local government revenues and expen
ditures must keep pace with population and job growth. This
indicator compares growth in the revenues and capital expen
1.50
ditures of Silicon Valley cities relative to growth in population
and employment.
1.40
1.30
HOW Are WE DOING?
Growth in the combined revenue of all cities in Silicon Valley
has been catching up with population and', employment growth.
1.20
?<
1.10
Adjusted for inflation, total revenue increased 49% from fiscal
1.00
year 1988 to 1998, from $1.3 billion to $2.0 billion. During this
period, demand for services, as measured by ,increases in popu
0.90
lation and employment, increased by 58%.
Cities increasingly rely on other taxes (e.g., utility, hotel) and on
other revenue sources (e.g., fees) to stabilize and grow revenue
aligned with demand for services. Sales and property taxes do
not always track growth in population, employment and wealth. .
0.80
1988
1989
1990
1991
1992
I TOTAL REVENUE
1993
1994
1995
1996
1997
1998
CAPITAL EXPENDITURE
Ml POPULATION AND EMPLOYMENT
In 1998, 70% of total revenues were based on sources other than
sales and property tax, compared with 63% in 1988.
REVENUE SOURCES FOR SILICON VALLEY CITIES
15%
Sales tax revenues are determined by retail expenditures and by
sales tax-generating commercial and industrial activities. Property
taxes lag economic growth, and have actually declined by 1% in
10%
real terms since 1988 because of Proposition 13 restrictions on
increases in assessed valuation.
22%
44%
48%
In 1998, capital expenditures continued their upward trend
started in 1997. Between 1988 and 1996, annual capital expendi
tures of Valley communities did not keep pace with population
22%
and employment growth, decreasing in real terms by 10% overall. ■
Since then, aggregate capital expenditures jumped 52%.
1988
■■I SALES TAX
PROPERTY TAX
1998
I OTHER REVENUE SOURCES
I OTHER TAXES
Source: Slate Controller's Reports.
(g)
matching resources and responsibility .Valley cities, counties and other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
After Years of Falling Behind, Goyernment Capital Expenditures Increase 30%
WHY IS THIS IMPORTANT?
GROWTH OF CAPITAL EXPENDITURES OF SILICON VALLEY'S CITIES
COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
. To maintain service levels, capital expenditures by local govern
ment must keep up with both population and job growth. Capital
expenditures fund road, bridge and storm drain construction and
maintenance; police and fire equipment; water and sewer system
1.35 ■
improvements; and parks, libraries and community facilities.
1.25 ■
HOW ARE WE DOING?
In 1997, capital expenditures increased draitiaticallyj reversing
V
1.15 ■
Y'
the previous downward trend.
Between 1988 and 1996, annual capital expenditures of Valley
communides did not keep pace with population and employment
growth, decreasing in real terms by 10% overall. In 1997, aggregate
1.05 -
0.95 ■
capital expenditures jumped 30%. Twenty of the 27 cities
increased their capital expenditures over 1996 levels, half of them
by 50% or more. Expenditures were primarily for street mainte
0.85
1988
nance and repair, recreational facilities and sewer system repairs.
Economic growth has increased sales tax and other revenues,
1989
1990
1991
1992
I CAPITAL EXPENDITURE GROWTH
enabling cities to start projects previously deferred for lack offunds.
Source: California State Controller's Reports
@
1993
1994
1995.
1996
1997
I POPULATION & EMPLOYMENT GROWTH
With demand rapidly escalating, restrictions on and industrial developrnent, generate the bulk
supply have also exerted enormous inflationary ofthe revenue that fills city coffers. A1999 sur
"By allowing
fiscal policy to
pressure on housing markets. Prohibitions on vey by the Public Policy Institute of California
developing land that would otherwise be suit substantiated the effect ofthis logic, noting that
able for housing, such as San Jose's Urban the state's city managers placed far more value
Growth Boundary, may serve legitimate envi on generating new sales tax revenue than filhng
drive land use
choices,city
officials niake
decisions that
ronmental objectives. However,by limiting land the need for affordable housing.**
availability,,they also contribute to the rise of
By allowing fiscal policy to drive land use
choices, city officials make decisions that ap
Neighborhood opposition to new housing devel pear financially prudent, but cause lasting dam
opment is another key factor in Silicon Valley's age to the community. Some state leaders now
housing shortage.Though empirical evidence to recognize the dangers of"fiscalizing" land use,
support their worries fails to exist, homeowner but have had difficulty overcoming resistance
concem that the introduction ofafibrdable hous-~ by local officials to change.
appear
housing pri^s.*-^^
financially
prudent, but
cause lasting
damage to the
community."
ing in their neighborhoods will diminish prop
erty values has bolstered opposition to needed
development. This"not in my backyard"senti
ment has been a major obstacle to the expan
sion of affordable housing in San Jose.
1
|P
li
TABLE 2: Ratio of jobs to housing
PaloAito
Additionally, California's public finance system
works to discourage new housing development
by denying cities the tax revenues necessary to
pay for the basic services new residents require.
For example,the total amount ofproperty taxes
received by the City of San Jose for FY 99-00
W-'
R
Santa Clara Sunnyvale San Jose
Population (i)
61,505
Number of jobs, 2000(2) 106,690
Housing units(3)
26,097
102,895
135,370
39,326
133,215
131,140
54,437
923,591
410,990
287,506
i
fc
Jobs to housing ratio
3.4
2.4
1.4
&
4.1
1 California Department of Rnance projections: January, 2001.
2Association of Bay Area Governments(ABAG)job projections.
3 California Department of Finance projections; January, 2001.
Si:.
1
totaled $66,684,000.These revenues constituted
less than halfofthe police department's operat
ing budget alone $175,092,408. Given these
limitations,it's little surprise that municipahties
often regard new housing less as an asset than
as a source ofnew expense. On the other hand,
sales taxes, which are generated through retail
* The UGB encourages "smart^^rowth" strategies to address the jobshousing imbalance and related stress on our infrastructure. One such
strategy is to build housing along transit corridors.
M
** Despite the fiscal disincentives for housing construction, it is
important to note that different citiesi in the region vary significantly in
the extent to which they allow these pressures to.limit their commit
ment to the production of affordable housing.As Table 2 demonstrates,
San Jose stands out as the city with the greatest sense of regional
responsibility towards responding to the vaile/s housing needs. Not
only is San Jose's jobs/housing ratio much lower than those of other
cifies, it also produces a higher percentage of subsidized units. Thus,
San Jose does less to cause housing price inflation and does more to
mitigate the effects of high housing costs than its neighboring cities.
Silicon Vallcy^s
Housing Crisis
WORKING PARTNERSHIPS USA 1
ii
tl
k
4 PROPOSED SOLUTIONS TO LOW INCOME HOUSING
AFFORDABILITY
The worsening ofthe affordable housing shortage in the case oflow-income households
directly stems from 2 reasons; a drop in the number of unsubsidized low-cost rental housing
units in the private market and a growing number oflow-income renter households. The
latter occurred because disproportionately morejobs that were created in certain areas in
California were low-income jobs. The first part ofthis chapter(Section 4.1)presents Steps
that State policy makers can take to insure that the solution to middle-income hosing
affordability does not make low-income affordability worse. The second part ofthis chapter
(Section 4.2) presents the case study ofthe Housing Trust of Santa Clara County(HTSCC).
4.1 Steps That State Policy Makers and Housing Personnel Can Take
Density: Raising the development capacity of existing sites increases the overall
potential supply of housing by making more intensive use ofavailable land. Higher
densities can improve the affordability of housing because per unit land costs are lower and
construction can be performed more efficiently. Density increases near employment centers
and transit nodes can also help to alleviate automobile congestion. Many counties have
incorporated these "Smart Growth" policies in their consolidated plans. Communities can
adopt zoning and/or subdivision regulations to allow a "density bonus" above that which is
normally permitted on the site in exchange for the provision ofsome below market rate
housing units. Local authorities could enhance compatibility between the new higher
density development and existing development and focus public debate on the actual
appearance and effect of new housing rather than arbitrary density numbers.
44
Inclusionary Zoning: Inclusionary zoning stipulates a minimum percentage oflow ■
and moderate-income housing in new developments. Inclusionary programs are based on
mandatory requirements or on development incentives, such as density bonuses. The
establishment ofinclusionary zoning does not depend on State or Federal subsidies or the
direct involvement of outside agencies. It is a local requirement under local control. If a
jurisdiction is attempting to alleviate the acute housing short^e for low- to moderateincome households through zoning,inclusionary zoning is a good choice.
Office/Housing Linkage Programs: Some commimities with a housing crisis haye
found it necessary to require new industrial, commercial,and office development to aid in
the development ofhousing.In a linkage program, project approval is conditional with the
applicant either directly providing market rate and/or affordable housing, or paying in-lieu
.n
fees for housing purposes. Linkage programs can be mandatory in which all new nonresidential development must devote, or pay in-lieu fees, a percentage oftheir development
to affordable housing. Cities ejqperiencing large-scale employment growth can use linkage
programs to mitigate the impact Of new jobs on the local housing market or community as a
whole. Some housing authorities doubt the merits ofthis approach;they favor the "carrot"
approach rather than a "stick" approach.^"
Rezoning Vacant Landfor Residential Use: Many areas in Southern Califomia and
the Bay Area have a shortage ofland designated for residential use and a surplus ofland set
aside for commercial, office, and industrial use. Politically, changing the general plan and
rezoning surplus industrial and/or commercial land can be an effective way to make a
significant amoxmt ofland available for housing. In addition,imderutilized a^cultural land
and surplus land owned by public entities can be rezoned for residential use. Many
45
communities own land: unused school sites, surplus public properties, and even the air rights
of parking lots. All have the potential to house a new residential development.
Mixed Use: In contrast to conventional single use development, mixed use
development of a tract ofland or structure combines residential uses with one or more other
uses such aS office, retail, public, entertainment, or even manufacturing. Mixing uses often
requires changes to the zoning ordinance or planned unit development regulations. To
encoiuage housing, a community can allow residential uses in cormhercial areas and other
non-residential zones,especially downtowns,thereby creating multi-use ^eas.
Infill: Infill development occurs on sites that have been bypassed by previous
development. Utilities and other infiastructure typically already serve infill sites; this can
reduce the fi:ont-end costs of development. These sites are often well suited to multiple
family projects, as more units offset higher land costs and make housing more affordable
Landbanking: The development of affordable housing depends, to a large degree on
thOjavailability ofa site. Landbanking is a technique whereby a city or county,in
anticipation offuture development,acquires vacant land or underutilized sites at a lower
cost or before it comes on die market State law gives local governments, and non-profits,
,
^
■
■
priority in the purchase of surplus land. When resold or leased to a developer, restrictions for
the development ofaffordable housing can apply.
Growth Control Exemptions: Many jurisdictions have enacted ordinances to control
their growth. They may do this by limiting the number ofbuilding permits that can be issued
each year, limitrng growth in specific areas or corridors and encouraging it in o&ers, or
restricting major development until certain infrastructure performance standards are being
achieved. Although removing these growth limits may be the most effective way to improve
46
overall affordability, the growth control criteria by which projects are permitted can be
designed in such a way as to encourage certain types of affordable housing.
Adaptive Reuse: The conversion ofoutmoded buildings such as old school buildings,
train stations, warehouses,factories, and other industrial buildings, can provide the
opportunity for new residential uses within a community.''
Self-Help Housing: Self-help, or sweat equity, housing enables potential
homeowners to build up credit for a down payment on a home by contributing their labor to
the construction or renovation. California Housing Finance Agency(CHFA)finances self-
help housing by providing below market bond financing for mor^ages on homes in urban
areas. The Farmers Home Administration Mutual Self-Help Housing program has sponsored
many rural projects.
Factory-Built Housing: Factory-built houses are the least expensive to construct.
Once built, these prefabricated houses blend with custom housing. Manufactured housing
are factory built mobhe homes built to the HUD mobile home standards.
Mobile Home Park Preservation: The preservation of mobile home parks allows a
community to protect a valuable source ofusually irreplaceable affordable housing.
Senior Housing: Typical techniques to meet the housing needs ofthe elderly include:
smaller attached or detached housing for independent living (both market rate and
affordable); second units; homesharing for those who wish to stay in their homes; agerestricted, below market rate rental projects; congregate care facilities; lifecare facilities
(similar to congregate care, but where occupants own their own condominium or
cooperative unit); residential care homes licensed by the State; and skilled nursing homes.
47
Single Room Occupancy Hotel: Formerly homeless people often find SROs an
affordable entry point into the housing market. The availability oflow-cost SROs can also
protect some people from becoming homeless.
Streamlining Procedures: Recognizing that administrative delay adds to
development costs,jurisdictions have reviewed and streamlined their land use and
development procedures. The intent is to simplify and coordinate the means ofobtaining
rezonings, use permits, subdivisions, approval ofdesign and engineering plans, and building
permits.
PATH:The energy costs of housing are among the most controllable factors
affecting housing affbrdability. High utility or energy costs could be the final factor that
forces a family into homelessness. (Especially considering the current "energy crisis that
California faces.) The Partnership for Advancing Technology in Housing(PATH),reduces
the cost ofbuilding and operating homes by helping to speed the adoption of new
technologies in building as well as in saving energy. PATH homes lead to a 20%
reduction in the purchase price ofa home.
Effective Use ofLocal Resourcesfor Affordable Housing: Private sources of
financing and funding are available, and growing. Foundations, banks, savings & loans, and
private investors have become much more active in assisting in the development of
affordable housing. California voters have passed several bond measures to fimd
rehabilitation and construction ofa significant amount of affordable housing.
Municipal bonds put the power ofpublic finance to work for affordable housing. Because
the holders of municipal bonds pay no taxes on the interest they receive, local bonds have
48
lower interest rates than conventional financing. Local governments can also apply other .
financing tools to assist in residential development
State Funding has been given a boost by the passage oftwo bond measures to make
available $450 million statewide for new construction and rehabilitation ofaffordable
housing. Private Resources are available fi-om banks and savings and loans as well as
private investors. Commitments to the community.Federal regulations, and the tax code
have helped create several financing and subsidy sources for the development of affordable
housing.
Package and Advertise Information on HomeBuyer Assistance and Low Cost
Rentals: Lack of knowledge of all programs and resources is a final barrier to home
ownership. Housing Authorities should have homeownership fairs, seminars and trainings
have greatly assisted would be purchasers in sifting through the glut ofdata and claims made
by lenders.^^
Expand City-County Partnerships: Many cities have established redevelopment
areas. Under State law,20% of gross redevelopment revenues must be set aside into a low-
income housing fimd(LIHF)and be spent on eligible housing activities. Many cities have
substantial fimds that have not yet been allocated or encumbered. If counties enter into
partnerships with such cities to encourage rehabilitation, new construction or
homeownership within an incoiporated city, the county should expect to leverage that city's
resources in the following ways.
■ Coimties shoiild undertake efforts to identify all surplus counly-ovmed property with the
intention ofselling or leasing the land for affordable housing projects, where appropriate
and feasible.
49
■ Encourage development of affordable housing on parcels located in the unincorporated
areas ofthe county w^iere land may be cheaper.
■ Donate, selling or leasing land at a significant discount \^en the land is being used for
development of affordable housing
The
Affordable Housing Strategy, 1999, mentions several guiding principles
for Orange County. Many ofthese principles have a general appeal that could be used as
general guidelines
■
Given limited resources, do not compete with the private sector.
■
Coordinate county efforts in support of city efforts.
■
Stimulate activities that would otherwise not occur.
■ Help those who are attempting to help themselves
■
Help with a hand-up, not with a handout.
■ Tackle problems affecting communities, notjust individuals.
■ Focus on lending, not granting.
■ Focus on leveraging other resources, not duplicating them.
■ Focus on roles that utilize the strengths ofother institutions such as lenders' expertise.
■ Focus on efSciency,for example, use Section 8 operating reserves more efficiently.
■ Reducing program administration costs by linking programs and designating one lead
agency.
■ Keep approaches as simple as possible and fill in gaps.
■ Maximize the efficiency ofhousing authority by having outside firms handle routine
tasks such as origiimtion, servicing, monitoring, and on-going marketing.
50
Reverse neighborhood decline in targeted unincoiporated islands in a coordinated effort
to encourage their annexation.
Provide 3 options for loan subsidy approaches to owners who are willing to maintain
their rents at affordable levels for 10 years. This wiU reverse neighborhood decline
Option 1: Offer interest wnte-down grants through existing financial institutions
for qualifying rental properties, and market the program jointly with participating
lenders. HUD has studied rental programs around the country, and found thaf
this strategy can lead to a high level ofefficiency and leverage. The loan would
be due in fiill, possibly with a penalty or higher interest rate, ifrents rise above
affordable levels. Market the low interest loansjointly with lenders.
Option 2: The Coimty provides direct second loans to qualifying apartment
builders. The second loan would be on a residual receipts basis and forgivable, a
tenth at a time,over ten years. Rents would be capped at affordable levels for
these 10 years. The county would monitor performance in al these cases.
Option 3: Set up a loss reserve program. The housing authority would deposit a
sum with lenders to be held as a reserve for losses on a second mortgage.
Lenders would make loans for needed rehabilitation to qualifying apartment
owners. Rents would be limited for 10 years at affordable levels with penalties
for non-compliance HOME and redevelopment funds can be used for rental
rehabilitation efforts.
4.2 Case Study—Housing Trust of Santa Clara County
Santa Clara County-the heart ofthe booming Silicon Valley-faces a severe crisis
ofaffordable housing. In Silicon Valley, you are at the poverty level if you are malring
51
Facts and Figures
Important Information About California
New Single Family Units
thousands
of homes
i of units
Califomia
permnted
New Multi-Family Units
1 thousands
California
: permitted
180
1980-2000
160
—
150
■ai
140
120
125
100
s.
10G
80
' C. i
60
40
20
19^ 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
.
—
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Prepared by the Califonv'a Economic ForecastProject
Preparedby the Califomia Economic Forecast Project
Affbrdability Index
(penxn
ofhMseholcis
|i||
A
0
Ratio of Caiiibiria Median Home Selling Price
to U.S. Median Home Seiiing Price
lab'o
Califomia
1990-2000
SL2
n
»
December 1988-December 2000 '
*
ZO
-
|i
m
f ^
-
1.6
r
1990
1991
1992
1.8
1
r "
r-
»
i
1.4
I
m
*
1993
1.2
1994
1995
1996
1997
1998
1999
Deo-90
2000
Source; Califomia Association cIREALTORSS
600
Deo96
Deo98
DeoOO
Median Hcne SeKng Price
tteusands
Santa data, San Francisco, & Sactamerto Counties
cfdollara
Doo.94
Preparedby the California EconomicForecastProject
Median Hons Selling Price
thousands
000-92
Los Angeles Orange, and San Diega OouiSes
efdoilara
330
December 1992' December 2000
SOC
290
400
250
m 300
210
December 1992-December 2000
Orange
\
San Francisco Bay
^200
i
170
Sacrame
San Diego
IOC
Deo.92
18
Los Angeles
130
Deo93
Deo-94
Dec>95
Deo>96
Deo97
Dec-9a
Deo-99
Dec-00
Deo-92
Deo-93
Deo-94
Deo-95
Dec-96
Deo-97
Dec-S8
Dec-99
Deo^JO
Kathleen Connell, Califomia State Controller
rehabilitation programs, to a
housing policy focused on state
and local government initiatives.
Indeed, even though the two
Affordable
Housing and
major sources of affordable
California have organized to
advocate for more housing, it is
striking how little in the way of
policy and initiatives have
emerged from local governments.
housing financing, the use of This is all the more alarming
since, as we will see, it is local
bonds and the low-income governments that have by far
housing tax credit program,(both the greatest ability to influence
of which were created in the the development of affordable
1980's) involve
federal housing in California.
subsidies, both programs are
Rhetoric aside, local
administered and carried out at government Can really influence
the state and local level.
the development of affordable
Local
tax-exempt mortgage revenue
Government
Bill Witte
Related Companies
It is local governments
Beginning with the New
that have by far the Deal and running through major
The recent econoihic boom housing in only three meaningful
greatest ability to federal legislation in 1949,1968, has highlighted and in fact ways. First and foremost, it can
influence the
and 1974, the federal
government
was largely
development of
responsible
for
the
delivery of
affordable housing in
affordable housing in this
California.
country. The process,limited as
it was, was often heavily
politicized and couched in terms
ofother public policy objectives,
such as job creation or urban
renewal. The 1980's marked a
transition from,this dominant
federal role, which all but
ended with the demise of the
Section 8 new construction and
exacerbated the housing needs
of low- and moderate-income
people, particularly in high
growth areas in California. It
would not be mere hyperbole to
characterize the shortage of
affordable housing in California
as a brewing crisis. While the
encourage (or discourage)
developmentthrough local-land
use policies. Regardless of the
number and funding of subsidy
programs, little affordable
housing will occur unless there
is a supply ofland that is zoned
to accommodate it. Second, it
state government has responded
can designate surplus, publicly
with, among other things, the
first housing programs from
owned sites for affordable
housing.(The amount ofsurplus
General Fimds in decades, and property in many communities is
even business groups in the. often far greater than imagined.)
Bay Area and parts ofSouthern Third,it can utilize the financing
Figure 5
Housing Affordability Varies Widely Across
California
70 --
60 --
•54"
.47_
50 --
40
'33'
30
'23'
20 -- -16
-17
17---.
"14-
10
4®'
^
4
Source: California Association of Reallors, Percentage of households that can afford topurchase the median priced, detachedsingle
family home.
Controller's Quarterly ■
Spring 2001
programs that it does control,
preferably in combination with
San Jose, Mayor Ron Gorrzalez
has just announced a
housing in general and
affordable housing in particular
land use and regulatory policies
that help encourage such
development.
comprehensive housing policy
someone else's problem, or one
designed to funnel everincreasing dollars into affordable
housing and to encourage
that should be left to the free
Bay Area cities have often
been among the most proactive
in moving to address the
housing problem, which is not
surprising since the problem is
market. In many communities
throughout Los Angeles and
Orange Counties, for example,
significant new housing in the
City's still developing Coyote there is a head-in-the-sand
Valley.
mentality that has resulted in the
There are glimmers of highest ■ incidence
of
most acute there. Still, it is activity even in areas that overcrowding and the greatest
instructive to consider what can historically have shied away "affordability gap" (that is, the
be accomplished. In San from public sector initiatives. gap between household income
Francisco,wherefully 80% ofthe Cities throughout San Diego and market rents/prices) in the
city is already built out, the city County, for example, have country.
has aggressively moved to implemented ihclusionary
The point is not to direct
rezone
underused
non- housing policies in growth areas blame— there's plenty ofthat to
residential land to residential and master-planned commun
go around—^but to increase the
use, which has fueled a ities, ensuring that at least a visibility ofhousing as a political
downtown housing boom. In percentage of all new housing issue, and to build on the
addition, its Redevelopment development will serve the low- increasing number ofsuccessful
Agency allocates 40-50% of and moderate-income families local initiatives. The availability
its pool of tax increment funds that provide a significant chunk of decent, affordable housing is
to affordable housing, over ofthe local labor force,but who central to successful economic
twice the percentage required by without such a policy face long development, neighborhood
law. In Oakland, Mayor Jerry commutes to work.
revitalization, transportation,
Brown has taken dramatic steps
The above examples and a host of other public
to encourage the development unfortunately remain the policies.p
of housing in the City's long exceptions to the rule that most
neglected downtown. In local governments consider
Housiig Affcrdafcgayin CaGtonia is Vfel Bekwv the NaUcnal Average
Kathleen Connell,California State Controller
In San Franclsco...the
city has aggressively
moved to rezone under
used nonresidential
land to residential use,
which has fueled a
downtown housing
boom.
base salary ofa police officer in
Moreover, recruiting officers to
San Jose is $51,272; the base
fill vacated positions has proven
extremely challengiiig in a fertile
economy abimdant with privatesector jobs. The Los Angeles
Police Department currently
faces a shortage ofroughly 1,000
officers from their optimally full
staffof 10,176. Despite a costly
income of a firefighter in the
same region is $32,000. A few
simple mathematical calculations
add up to the unhappy
conclusion that public safety
officers simply cannot afford to
live in the communities they
serve. Although Santa Clara nationwide
recruitment
County encompasses one of campaign, only a few qualified
Housing for
Public Safety
By
Assemblywoman
Rebecca Cohn
(D-Saratoga)
California's most extreme
candidates were found and even
examples of today's record fewerjoined. Manythat declined
Public safety officers
A thriving community housing prices, the salaries of the position cited the cost of
simpiy cannot afford depends on housing. In police officers and firefighters living as one of the primary
to live in the
California, particularly in the
communities they
Silicon Valley, skyrocketing
serve.
throughout the state are
inadequate to buy homes in
higher-priced urban areas.
housing prices and insufficient
housing production are
The result is that the men
threatening the livelihood ofour and women who protect our
communities. The resulting communities fi-om crime and
problems are discussed danger have two options: one is
frequently -urban sprawl, to leave their departments for a
outrageous commute times, suburban, rural, or even out-oftrafSc congestion,limited family state position; the other is to
time for working parents - the commute several hours a day
deterrents from accepting
employment.
When officers undertake
long commutes the cost is both
to the communities they serve
from out-of-town residences.
and to their own quality oflife.
Policing and firefighting are both
highly stressful, dangerousjobs.
Adding several hours of
commuting to an already
demanding work schedule
compromises our safety. It is not
consequence less frequently
With
choice, our
in our best interests to have our
mentioned, but of critical
communities and our public
safety officers lose.
public safely officers physically
and mentally fatigued before
they even get to work.
Perhaps most importantly,
list is
interminable.
A
importance, is the toll our
housing crisis takes on public
safety.
The average price ofa home
in Santa Clara County is now an
astounding $560,550. The annual
either
When officers leave their
departments, cities lose the
experienced police officers and
firefighters that know their
communities
intimately.
om cities lose the benefits of
having peace officers and
firefighters as residing members
Figure 6
Rents Outpace Household Incomes
il
r- —
r-TT-
- - — ..... ....... ...TJ- —
mm
I**
Rent - 1.A
■
Rent-SF
~n
Median Renter
Median Renter
Income
witti Cliildren
Poor Renters
Poor Renters with
Children
Source: California Budgel ProjectAnalysis of the current population survey.
Poor households are those at the 20th percenhle.
Controller's Quarterly ■
Spring 2001
of the communities they serve.
Having police officers and
firefighters actually living in
neighborhoods
is
an
immeasurable contribution to
public safety. The very presence
of officers as neighbors and
stakeholders in the communities
where ourfamilies live, work and
play make neighborhoods more
attractive to residents, less
attractive to criminals and safer
in general.
This is the rationale behind
the Federal Housing and Urban
Development Department's
Officer Next Door Program,
which provides a 50% discount
on homes for police officers in
2000, which originally included
several mortgage assistance
programs for public safety
officers, passed last session
with no provision for housing aid
to police officers and firefighters.
It may therefore be up to
California to assume leadership
this year in helping our public
safety officers in this time of
housing need.
Until we are able to provide
affordably adequate housing in
the communities where people
work, or until we are able to
compensate public safely officers
in such a way that they can
afford to reside in these
communities, we must do
economically distressed areas
classified by HUD as
the
revitali2ation areas. Several cities
between base income and
everything possible to mitigate
untenable
difference
and Long Beach will act as a
recruitment incentive for these
departments and will help
officers
to
move
into
communities previously out of
their price range.
The overall housing
shortage in California needs to
be addressed systematically.
Our state's fiscal system, which
forces local governments to rely
on sales taxes rather than
property taxes, provides strong
disincentive for community
development and must be
reformed. Local governments
must adopt zoning and land-use
policies that accommodate
housing for all income levels and
densities. More money needs
to be invested in housing
development if we are to house
nationwide including Los
inflated housing costs. For this
all of our state's citizens
Angeles,CA,Portland,OR,Fort
Wayne, INj and Columbia, SO
have also implemented home
reason. State Controller Kathleen
adequately and safely. However,
for the present shortterm,we can
and should provide assistance
loan programs to encourage
up to $7,500 to help police
officers and firefighters purchase
to public safety officers to
homes in the cities where they
work. This loan will be forgiven
if the officer stays with the
in part due to such a program.
municipal department for five
Unforttmately, Congress' years. This program, to be
American Homeownership and piloted in Los Angeles, San
Economic Opportunity Act of Francisco, San Diego, San Jose
neighborhoods. We owe this not
only to these valiant men and
police officers to live in the
communities they serve. In
Columbia alone,crime fell sixteen
percent between 1991 and 1996,
Coimell and I have introduced
AB 905,which will provide loans
become residents of our own
women for the service they
provide our communities, but
also to our own families and
neighborhood safety.
Renters are Hardest Hit
Affordabillty in terms of rent Is defined as paying less than 30% of income for shelter. 43%
of all Caiifornia households are renters, and more than a quarter spend more than half of
their income on rent.
47% of California renter households pay over 30% of their incomes for housing.
In 1999, 45% of California renters were unable to afford the fair market rent on a twobedroom apartment.
In 1997, the number of low income renter households in the state's metropolitan areas
exceeded low cost rental units by 2.1-to-l, a gap of 684,000 units.
In the Los Angeles Metropolitan area, rent has risen 15%, while the median income of
renters rose 9.6%.
Source: California Budget Project
Kathleen Connell,California State Controller.
We must do everything
possible to mitigate
the untenable
difference between
base income and
inflated housing costs.
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING AND OTHER REGIONAL ISSUES
prepared by:
Susan Sllveira
Springboard Consulting
Housing and Other Regional Issues
Statewide Impact
California's housing crisis has serious implications for the femilies affected, for the
communities in which they live and for the overall well being ofthe state's economy.
Many ofthe connections between housing and other issues are frequently overlooked, but
they include: ^
The homing crisis threatens to undemune the continued growth ofCalifornia's
economy. The housing crisis in Silicon Valley, the engine of much ofthe state's
economic growth, has reached epic proportions. Many businesses report problems
attracting employees from other parts ofthe state or the country because ofthe
high cost ofhousing in that community. In many metropolitan areas, workers who
provide basic services - teachers, firefighters, secretaries - cannot afford to live in
the communities where they work.
High homing costs have impacts at the community level Rising costs are
forcing many low- income femilies from communities where they have lived for
decades. In the San Francisco Bay Area, gentrification oftraditionally low and
working class neighborhoods is running rampant. Housing pressures are so
intense that long-time residents ofneighborhoods, such as San Francisco's
Mission District and East Palo Alto, are being forced to move out ofthe
neighborhoods that they have called home for generations, reducing both social
and economic diversity in these areas.
The ability to obtain higher rents on the open market is leading many landlords to
opt out offederal housing programs. Landlords are pre-paying mortgages and
refijsing to renew contracts to maintain affordability, eliminating what is
frequently the only affordable rental stock, making those communities the
exclusive enclaves ofhigher income households.
Intense homing marketpressures areputting pressure on the environment The
problems ofunchecked urban sprawl are by now familiar to most policymakers:
grid locked freeways, longer commute times for workers, greater air pollution,
and loss ofopen space. But one major contributing factor to urban sprawl is the
search for affordable housing. Families seeking affordable housing are being
forced ferther from the metropolitan core to find it. In the Bay Area,for example,
the number ofvehicle miles driven increased 18.6 percent between 1990 and
2000. During the same period, population increased at two-thirds the pace(13.3
percent). Distant suburbs are often the only option for yoimg families seeking to
buy their first home. Yet, affordability comes at a cost: reduced time to devote to
family and community as a result oflengthy commutes and the loss ofprime
agricultural land to development.
The homing crisis exacts a great toll on the health and well being offamilies.
Studies indicate that children who live in imaffordable or substandard housing are
more likely than adequately housed children to suffer a variety of health
'Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
problems. Without affordable housing, children often lack adequate nutrition and
do not arrive at school ready to leam. Also,families with high rent burdens move
more frequently than those families with more affordable rents - res^llting in
frequent school changes for their children. Taken together, it is not surprising to
leam that children with poor housing conditions perform less well in school than
those with more affordable and stable housing.
The lack ofaffordable homing limits the ability ofthe working poor and those
on welfare to move up the economic ladder. Housing plays a critical role in
helping welfare recipients make the transition to work. The high cost ofhousing
in the parts ofthe state where jobs are most plentiful may discourage welfare
recipients from relocating from areas where job opportunities are more limited,
but housing less costly. Surveys of welfare recipients indicate that housing
problems pose substantial barriers to findiug and retaining employment. One
reason for this may be that after paying for housing, welfare recipients have little
extra money left over to pay for child care and other expenses associated with
work.
The homing crisis contributes to the continuing problem ofhomelessness. The
lack ofaffordable housing contributes to the ongoing tragedy ofhomelessness
throughout the state. While many factors, including substance abuse, mental
illness, poor health status, and disabilities, can result in poverty and cause
homelessness, affordable housing is at the heart of what is needed to both prevent
individuals and femilies from becoming homeless and address the problems of
those who are already living in shelters or on the streets. ^
Santa Clara County Focus
Housing/Transportation
Thirty-seven percent ofnew housing units and 32% ofnew jobs were located near transit
in 2000.^ In 1999,57% ofnew housing units and 35% ofnew jobs were located near
transit."^
Per capita transit ridership mcreased for the first time in three years, because ofincreased
ridership on Caltrain and light rail.^
The number of workers commuting into Santa Clara County from surrounding covmties
increased from 144,000 in 1990 to 212,000 in 2000-a 47% increase. The commuters'
share oftotal employment in Santa Clara County increased from 16% in 1990 to 20% in
2000. ^
^ Locked Out: California's Affordable Housing Crisis, California Budget Project Feb. 26,2001
^ Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2000 Index of Silicon Valley
^ Joint Venture's 2001 Index ofSilicon Valley
®Ibid.
Thirty percent oftotal freeway miles received the worst possible congestion rating, up
from 27% in 19987 The limited number ofhomes near job centers in Silicon Valley is
the primary cause ofcongestion in the corridors leading to and from Silicon Valley7 In
1995 there were 41,400 jobs in Silicon Valley located within Va mile of Caltrain or Light
rail, 3.8% ofthe total number ofjobs in Silicon Valley. It is projected that 60,400 jobs,
4% ofthe total will be located near transit centers in 2010. In 1995 there were 9,600
households located within % mile of Caltrain or light rail, 1.2% ofthe total number of
households in Silicon Valley. It is projected that 14,100 households, 1.6% ofthe total,
will be located within % mile oftransit centers by the year 2010.®
The lack of affordable housing forces 133,000 Silicon Valley workers to live outside
Santa Clara County.'''
About 78% ofthe coimty's workforce lives vidthin Santa Clara County. This means that
22 percent ofjobs in the county are filled with workers commuting from other counties.
This situation is exacerbated by the continued high growth in thejob market and the high
cost ofhousing. With the median price ofa single-family home at $547,000 in July
2000, available affordable housmg for Santa Clara County workers is diminishing.
Currently, the number ofemployees living outside ofSanta Clara County is about
237,000. By 2020, nearly 50,000 more people will be commuting to the coimty for
jobs."
Housing/Education
More tlwn 13% ofK-12 teachers in Silicon Valley are not fully certified.
Fiscalization ofLand Use
Revenues for Silicon Valley cities are catching up with population and employment
growth,though revenue sources have shifted away from sales and property tax.'^
Housing/Jobs
Silicon Valley employment grew an estimated 3% in 2000,compared to an average of
4.6% for the five prior years.''' It is estimated that 50,000 ofthese new jobs were filled
by new commuters into Silicon Valley and it is expected that these numbers will climb.'^
Silicon Valley employment grew an estimated 3% in 2000, compared to an average of
4.6% for the five prior years.
^ Joint Venture's 2001 Index of Silicon Valley
^ Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
® Silicon Valley Projections 2000, Silicon Valley Manu&cturing Groupn
Everyone's Valley, Working Partnerships USA
"Valley Transportation Plan 2020, VTA,Dec. 2000
Ibid.
"Joint Venture's 2001 Index ofSilicon Valley
Joint Venture 2001 Index of Silicon Valley
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Ibid.
Since 1992,jobs have grown four times faster than housing. To keep pace with job
growth,the region would have to build an additional 160,000 units.'' Other estimates
indicate that Silicon Valley will need between 112,039 to 146,366 additional homes
between 2000 and 2020.' The San Jose/Milpitas sub-region will generate 44-50 percent
oftotal housing demand,followed by 16-28 percent in northwest Santa Clara County,
and 13-15 percent in southern Alameda County. Southern Santa Clara County, southern
San Mateo Covmty, and southwest Santa Clara County account for approximately 18
percent offiiture housing demand.'^
While 2jobs were created for every new home in Silicon Valley during the 1980s,
approximately 3jobs have been created for every new home in the region during the
1990s."' ABAG reports for 1995-2000 an average countywide ratio ofnew jobs to new
housing units of6 to 1, with the five highest being in Santa Claraj^Milpitas, Mountain
View,Palo Alto and Los Gatos. ABAG projections for 2000-2005 show an average
countywide ratio ofnew jobs to new housing iinits of2.5 to 1, with the five highest being
in Milpitas, Los Gatos, Santa Clara, Palo Alto and Mountain View.^'
More than 70 percent of Silicon Valley's total employment growth fi-om 1979-1999 has
occurred in the job rich areas ofnorthwest Santa Clara County(Cupertino, Los Altos, Los
Altos Hills, Mountain View,Palo Alto, Santa Clara, Sunnyvale), north San Jose, and
southern San Mateo County.^^
Overall employment in Silicon Valley grew by 48 percent between 1980 and 2000. This
represents a total projected net increase ofapproximately 415,000 jobs, including
replacement for the 22,000jobs the region is estimated to have lost between 1990 and
1995. Over one-halfofalljobs added in the region firom 1979-1999 were created in the
five- year period from 1995 to 2000. ABAG estimates and projections for employment
in Silicon Valley indicate that the incredible job growth currently being experienced will
taper offconsiderably in the decade ahead. Employment growth is expected to slow even
more between 2010 and 2020, down from 6.2% growth between 2005-2010 to 4.0% for
2010-2015, and 4.2% for 2015-2020.
The number ofpublicly traded fast-growth companies dropped from 86 in 1999 to 66 in
2000.^"
"Joint Venture 2001 Index of Silicon Valley
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufecturing Group and Greenbelt Alliance by Strategic Economics, November 1999
ABAG Projections 2000
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
^ Building Sustainable Communities: Housing Solutions for Silicon Valley.Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Joint Venture's 2001 Index of Silicon Valley
4
For the third year. Software added the most new jobs.
The job-rich sub-region ofnorthwest Santa Clara County produced 2jobs for every new
home built during the 1980s, but approximately 9jobs for every new home built in the
1990s. Southern San Mateo County produced 0.7 jobs for every new home built in the
1980s, but an estimated 7 new jobs for every new home built in the 1990s.^®
Over the next 20 years(2000-2020) between 66 and 72 percent ofhousing demand will
be in San Jose/Milpitas and northwest Santa Clara County, the same areas projected to
capture approximately 67 percent of Silicon Valley's total new job growth.^^
Housing/Population Growth
ABAG population projections show that for the upcoming two decades the population
growth ofSilicon Valley is expected to slow down. Overall, the Valley's population is
projected to increase by about 11 percent between 2000 and 2020, with 7.4 percent
growth between 2000-2010, and 3.6 percent growth between 2010-2020. The cities
expected to experience the most dramatic population increases between 2000 and 2020
are Morgan Hill(30 percent) and Gilroy(35 percent)in southern Santa Clara County, and
Fremont and Union City in southern Alameda Covmty.^®
HousingAVages
Real per capita income, a measure of wealth creation, increased 6% in 2000, similar to
199929
Average wages in industry clusters continued sharp ascent with Software reaching
$125,000 and Semiconductors $117,000.^"
Venture capital investment more than doubled in 2000 to $ 17 billion.^^
Silicon VaUey was home to 48 ofthe 500 fastest growing high-tech companies in the
United States m 2000,a decline from 61 in 1999.^^
In 2000,the region's average wage increased 9% in real terms, from $60,800 to $66,400.
This increase compares to a national increase of2% to $36,200.^^
^ Joint Venture's 2001 Index of Silicon Valley
Ibid.
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics,November 1999
Building Sustainable Communities: Housing Solutions for Silicon Valley. Prepared for the Silicon
Valley Manufacturing Group and Greenbelt Alliance by Strategic Economics, November 1999
Ibid.
Ibid.
Ibid.
Ibid.
Ibid.
Average wages for industry clusters increased 20%; wages in other industries increased
1%.^^
A representative household at the bottom 20% of Silicon Valley's income distribution has
less income now than in 1993. A representative household in the bottom 20% earns an
estimated $40,000. In the last two years(1998-99), households at the bottom 20% of
the income distribution saw their income increase slightly, but their 1999 income
remained below 1992 levels.
Incomes for the top earning 20% ofhouseholds rose an estimated 20% in inflation-
adjusted terms since 1993 to $149,000.^^
Forty percent ofalljobs in Silicon Valley are in the following industry clusters:
computers/communications, semiconductors/semiconductor equipment, software,
bioscience, defense/space, innovation services and professional services.
Last year, Silicon Valley generated four times as manyjobs as new housing units. In the
northern part ofSilicon Valley,job growth outpaced housing construction by 16:1
Local Government Investment
Capital investment by local governments in Silicon Valleyjumped 30% between 1996
and 1997(the latest year for which data are available), after having declined or grown
only nominally each year since 1990.'*°
Housing/Energy Costs
In January 2001, 15,000 area Pacific Gas & Electric customers lost their electricity: a 15
percent increase fi:om January oflast year. Electricity costs, which previously accounted
for 7 to 15 percent ofa low-income family's budget now claim between 17 and 45
percent.'**
Lack of Coordinated Strategy
Though the housing crisis touches every community,local leaders have yet to develop a
coordinated regional housing strategy similar to the approaches they have embraced for
combating air pollution, promoting mass transit and other challenges.'*^
Joint Venture's 2001 Index of Silicon Vallw
Ibid.
Joint Venture 2000 Index ofSilicon Valley
Joint Venture's 2001 Index of Silicon Valley
'«Ibid.
Everyone's Valley, Working Partnerships USA
Joint Venture's 2000 Index of Silicon Valley
Everyone's Valley, Working Partnerships USA
■*2 Ihid.
Strategies for Solutions
The Valley Transportation Authority's Livable Community and Pedestrian Program
will provide up to $20 million by 2020 from future federal fimding cycles for projects
that provide safe walking access to jobs, schools, bousing, transit and other destinations.
(With a 20% local match requirement these funds will total $24 million./^
Some relevant strategies for housing development in the Valley Transportation Plan 2020
include
1) use land efiBciently and support concentrated development with strategies
including: land use intensification and reuse, transportation investments that
minimize right of way requirements, and limiting land area dedicated to surface
parking, and
2) support development that e3q)ands housing accessibility relative to transportation
alternatives, proximity to job centers, child care and other essential services, range
ofaffordability, and opportunities for both rental housing and home ownership.''^
VTA already engages in land use activities to further its goals for concentrated
development. Three current efforts consist ofthe following activities:
1) Development Review-review ofproposals to ensure tlmt transportation is
adequately integrated.
2) Pro-Active Congestion Management Program-review ofproposals to ensure that
transportation impacts are minimized
3) Transit-Oriented Development-provides expertise and resources to achieve transitfriendly development.
Valley Transportation Plan 2020 expands VTA's activities in land use with two new
programs:
1) Best Practices for Integrating Transportation and Land Use-a partnership with
member agencies to support the consistent use ofland use strategies.
2) The Land Use/Transportation Investment Strategy-gives a more prominent
place to land use fectors in the planning and programming processes for
transportation projects.'^^
The Bay Area Alliance for Sustainable Development(Bay Area Alliance) is a multistakeholder coalition established in 1997 to develop and implement a sustainability action
plan for the Bay Area. The Bay Area Alliance has embraced the United Nations World
Commission on Environment and Development definition ofsustainable development as
the ability "to meet the needs ofthe present without compromising the ability offuture
generations to meet their own needs."
Everyone's Valley, Working Partnerships USA
^ Valley Transportation Plan 2020, Valley Transportation Authority Dec. 2000
Valley Transportation Plan 2020, Valley Transportation Authority Dec. 2000
The overall goal ofthe Bay Area Alhance is to reach consensus regionwide among a
critical mass ofstakeholder organizations and civic leaders regarding a new shared
vision rooted in common values about how the region can grow in a more sustainable
manner. The overarching strategy is to achieve the regionwide consensus on a new
shared vision through the development and adoption ofa "compact" that can become the
foundation for implementation actions by both the public and private sectors at the local,
regional, state and national levels.
The Bay Area Alliance is committed to fecilitating a regionwide dialogue on how the
region can grow in a more sustainable manner, and to taking actions commensurate with
achieving that goal. In aU activities and deliberations the Bay Area Alliance is employing
e-vision, integrating the essential Three Es in order to achieve and maintain a prosperous
economy, quality environment, and social equity.
Vision
The Bay Area Alliance for Sustainable Development adopted in June 1997 the following
Vision:
"We envision a Bay Area where the natural environment is vibrant, healthy and safe,
where the economy is robust and globally competitive, and where all citizens have
equitable opportunities to share in the benefits ofa quality environment and a prosperous
economy."
The members ofthe Bay Area Alliance for Sustainable Development agree that a
sustainable Bay Area must have the following attributes:
Environmental quality is excellent.
• The Bay Area ecosystemi ~ including the Bay-Delta Estuary, air quality,
wetlands and watersheds, and biodiversity ~ is healthy, vibrant, and productive.
• Open space and agriculture are preserved as a result ofefiScient, compact land use
patterns.
•
Resources are conserved and waste is eliminated.
The economy is prosperous.
• The regional economy is robust, and productivity is high.
• Unemployment rates are low, and poverty levels are decreased.
• Sufficient housing affordable to the workforce is available close to job centers.
• Traffic congestion is greatly reduced. There is a &st-rate public transportation
system including water transit and the percentage ofsingle occupant vehicle trips
significantly declines.
• Economic well-being and quality oflife are high in all neighborhoods.
The diverse segments of the population share the region's economic
prosperity and environmental quality.
• Education performance is greatly improved, especially among the disadvantaged
population.
• Strategic capital investments in priority neighborhoods, in partnership with local
neighborhood leaders, improve the physical and social environment, provide
living-wage jobs, and enhance housing opportunities for neighborhood residents.
• The workforce in all sectors and civic leadership throughout the region reflect the
diversity ofthe population.
• Land-use planning, economic development and the transportation network
minimize disparities among neighborhoods and municipalities.
The sustainable vision is possible, starting now and continuing over the next quarter
century.
Ten Commitments to Action
The members ofthe Bay Area Alliance for Sustainable Development propose the
following framework for bold action. The Ten Commitments are inextricably
interconnected, and they are directly linked to the previous ten challenges. The order of
listing is not intended to imply a priority.
1. Enable a diversified, sustainable and competitive economy to continue to prosper
and provide jobs in order to achieve a high quality oflife for all Bay Area
residents.
2. Accommodate sufficient housing affordable to all income levels within the Bay
Area to match population increases and job generation.
3. Target transportation investment to achieve a world-class comprehensive,
integrated and balanced multi-modal system that supports efficient land use and
decreases dependency on single-occupancy vehicle trips.
4. Preserve and restore the region's natural assets, including San Francisco Bay,
farmland, open space, other habitats, and air and water quality.
5. Use resources efficiently, eliminate pollution and significantly reduce waste.
6. Focus investment to preserve and revitalize neighborhoods.
7. Provide all residents with the opportunity for quality education and lifelong
learning to help them meet their highest aspirations.
8. Promote healthy and safe communities.
9. Implement local government fiscal reforms and revenue sharing.
10. Stimulate civic engagement.
These Ten Commitments to Action form the centerpiece ofthe Draft Compact for a
Sustainable Bay Area. The Draft Compact sets forth an overview statement and specific
actions associated with each ofthe ten commitments.
1. Enable a Diversified, Sustainable and Competitive Economy to Continue to Prosper and
Provide Jobs in order to Achieve a High Quality ofLife for All Bay Area Residents.
The Bay Area Alliance will work to strengthen the regional economy to reduce the
aggregate effect offiiture global, national, state or regional recessions. We will seek to
ensure that all sectors ofthe Bay Area population have the opportunity to participate in
the region's growing economic prosperity.
We commit ourselves to:
• Support and lead collaborative actions to enhance the region's economic strengths
and minimize its weaknesses while ensuring its comparative advantage, protecting
the environment and improving social equity.
• Encourage businesses in environmental technologies, material recycling, energy
efficiency, brownfields reuse and those that employ the disadvantaged.
• Participate in discussions on: growth and sustainability; the nature and quality of
jobs in the region; the relationship ofa living wage and sustainability; and
strategies to promote a living wage without affecting competitive positioiL
• Encourage the location ofjobs near places where workforce housing exists, and
link jobs and housing with convenient, affordable transit service.
• Link employer-based workforce development to the schools, including technical
and vocational schools.
2. Accommodate Sufficient Housing Affordable to All Income Levels within the Bay Area
to Match Population Increases and Job Generation
The Bay Area Alliance will work to protect and expand the supply ofhousing that is
needed by and affordable to all residents. Actions will be taken to promote housing the
most needy, current and fiiture workers ofall income levels in locations near transit,
community services and places ofemployment. We will coordinate our efforts with
regional agencies, local, state and federal governments, employers, community
organizations, developers, non-profits, business associations, economic development
organizations, foundations and lenders.
The Bay Area Alliance supports optimizing the potential for meeting land use needs for
new housing and jobs through increasing average densities with infill, land recycling,
transit villages, development ofclosed military bases, and revitalization ofpoor and older
neighborhoods while avoiding displacement. However, we recognize that even with
optimizing these strategies to achieve more efficient land-use, there might likely need to
be growth in Bay Area urban and suburban communities, but not in identified
10
environmentally sensitive areas, in order to meet the regional housing needs. The Bay
Area Alliance encourages management ofgrowth in a way that uses land efficiently,
reduces automobile dependency, minimizes inter-regional impacts and provides sufficient
housing opportunities to all income levels.
We commit ourselves to:
• Reach out to financial institutions to encourage diverse housing types and mixeduse investments at transit-supportive densities within urban areas, near transit,
which reuse imderutilized or deteriorated areas.
• Work with local community organizations to leam about their needs for housing
and services, including needs ofthe homeless, and encourage community
organizations to participate in planning, advocacy and implementation.
• Advocate in support of mixed-density and mixed-income residential development,
particularly in areas with transit and other services.
• Support efforts to use existing housing stock efficiently, by encomraging second
units, group housing and similar mechanisms.
• Support community-based efforts to retain and e^qiand the supply ofexisting
affordable housing and the adoption of measures to prevent displacement.
• Advocate local government actions, such as amending general plans and zoning
ordinances, and providing incentives, such as permit fast tracking,to encourage
affordable housing development, especially near transit.
• Advocate changes in federal and state legislation to provide incentives for the
development ofresource-efficient, affordable housing near transit, community
services and places ofemployment, and to address barriers such as construction
defect litigation.
• Establish an Affordable Housing Trust Fimd to assist jurisdictions in providing
their feir share ofaffordable housing.
• Support state legislative reform to improve the fair share housing process and
provide financial and other incentives to strengthen localjurisdictions' abilities to
meet their fair share responsibilities.
• Support preservation and conservation ofexisting housing stock such as housing
at closing military bases, single residential occupancy hotels and other affordable
housing.
• Support existing fair housing laws and prohibitions against discrimination in
housing.
11
Focus Investment to Preserve and Revitalize Neighborhoods
The Bay Area Alliance will work to establish a Community Investment Program
("Community Capital Investment Initiative") which supports neighborhood revitalization
efforts while encouraging compact, efficient development patterns. The program, which
is intended to complement existing efforts, will focus job development and training,
community improvements, and social services in neighborhoods e5q)eriencing decline,
including inner cities, older suburbs, and the 46 most inqjoverished neighborhoods in the
Bay Area. The program will provide assistance to community-based entrepreneurs. It will
also encourage employers with high growth opportunity to locate in these areas and use
indigenous vendors for needed services to the extent possible.
We commit ourselves to:
• Recruit community and Bay Area business leaders to participate in developing
and adopting a Community Investment Program("Community Capital Investment
Initiative").
• Support and strengthen the efforts ofeconomic development organizations in the
region that invest in stimulating local entrepreneurship in identified
neighborhoods that are in decline or at risk, while minimizing resident
displacement.
• Seek ways to address the adverse impacts ofgentrification and displacement of
low-and moderate-income residents.
• Work to assure that environmental, housing and infrastructure problems that
discourage investment in these neighborhoods are addressed, including training
and incentives for self-help neighborhood projects.
• Support and strengthen community-based financial institutions to fecilitate
neighborhood revitalization in low-income communities.
• Work with service providers to assure adequate job training and support programs
for local residents.
• Encourage business incubators, and vendors and suppliers to regional growthindustry clusters, to locate in impoverished neighborhoods to complement local
entrepreneurship.
• Support and strengthen the efforts ofemployers who recruit, hire, and train
currently imemployed or Underemployed welfere recipients and the working poor
for jobs with career and mcome growth potential.
• Ensure that new industrial development is compatible with neighborhood and
community needs.
12
Implement Local GJovernment Fiscal Reforms and Revenue Sharii^
To address local government finance and fiscal inequity and uncertainty, which currently
motivates local governments to plan and zone for revenue rather than for balanced
communities, the Bay Area Alliance will advocate changes in legislation and practices at
the state, regional and local level. The goals will be to reduce competition between
jurisdictions for development, reduce economic polarization in the region, and increase
cooperation. We will pay particular attention to improving the fiscal health of
economically distressed inner cities and older suburbs.
We commit ourselves to:
• Advocate changes in state legislation to provide local governments with adequate
and stable tax revenues,
• Establish cooperative, rather than competitive, economic development programs
at the sub-regional and regional levels.
• Encourage local governments to work together to determine how to allocate and
share tax revenues.
• Support expansion and strengthening ofsub-regional and regional cooperative
land-use planning and implementation efforts.
• Support legislative reforms that reduce the fiscalization ofland use.
Appendix A: Sustainable Development Indicators
Following are a set ofbroad indicators, listed by Commitment in the Draft Compact,that
the Bay Area Alliance will use to measure status and gauge progress(or lack thereof
toward sustainability. Where feasible, data will be tracked annually. In addition to these
broad indicators, others will be developed for many ofthe commitments and initiatives
associated with them. The Bay Area Alliance also recognizes that the indicators to be
tracked may change over time. The following are only those indicators to be tracked
initially. As experience is gained, the Bay Area Alliance may choose to add additional
indicators and/or delete some ofthem. This group ofindicators is intended to get the Bay
Area Alliance started on the path oftracking and publicly reporting the status of
sustainability in the region.
This set ofindicators is expected to be widely published by the Bay Area media and will
provide a periodic "report card" to the residents ofthe Bay Area. The Bay Area Alliance
recognizes that some ofthe indicators will require the development ofnew data sets. The
Bay Area Alliance strongly recommends that all applicable agencies, institutions and
jurisdictions implement a dedicated and fimded data collection and analysis effort on a
continuing basis to facilitate and eventually automate the collection, analysis and public
dissemination ofthe sustainable development indicators.
13
1. Enable a Diversified, Sustainable and Competitive Economy to Continue to
Prosper and Provide Jobs in order to Achieve a High Quality of Life for All Bay
Area Residents
Indicators:
a. Annual Gross Regional Product(GRP)/ Annual Genuine Progress Indicator
(GPI).
b. Persons below the poverty line (percentage ofthe population), including data by
ethnicity and gender.
c. Workers with jobs earning less than living-wage (percentage ofthe workforce)
and without benefits, number ofnew living-wage jobs and number ofnew small
businesses, including data by ethnicity and gender.
d. Median per capita income, mean income per capita, per capita income ofthe
lowest and highest quintUes ofincome, and the Gini coefficient.
2. Accommodate Sufficient Housing Affordable to All Income Levels within the Bay
Area to Match Population Increases and Job Generation
Indicators:
a. Housing starts vs. new jobs and population increases(annual and cumulative).
b. Percent oflow- and moderate-incomes spent on housing by renters and
homeowners and on commuting,including data by ethnicity and gender.
c. Housing miits needed injob surplus areas to alleviate severe congestion.
d. Average density ofnew housing and percent oftotal housing within 1/2 mile of
transit nodes.
e. Number ofhomeless, including data by ethnicity and gender.
Inter-Regional Cooperation'*^
An Inter-Regional Partnership(IRP),formed by three councils ofgovernments and local
officials representing five counties-San Joaquin, Stanislaus, Alameda, contra Costa and
Santa Clara-are bridging jiurisdictional boundaries to forge cooperative solutions to
shared problems. They are addressing problems like the geographic separation of
housing and employment, moxmting traffic and air pollution, and growth.
As a result ofthe work ofthe IRP partnership with California legislators, a $5 million
pilot program was adopted by the State Legislature in June 2000. The program will
create Jobs/Housing Opportunity Zones to spur new,inter-regional solutions to common
problems.
^ Silicon Vall^ Projections 2000, Silicon Valley Manufecturing Group
14
SANTA CLARA COUNTY HOUSING TASK FORCE:
HOUSING AND OTHER REGIONAL ISSUES:
SUPPLEMENTAL MATERIALS
GOAL 5: protect nature We meet high standards for improving our air and water quality, protecting and restoring the
natural environment and conserving natural resources.
Air Quality Shows Mixed Improvement
WHY IS THIS IMPORTANT?
DAYS PER YEAR THAT SILICON VALLEY AIR QUALITY
High-quality air is fundamental to the health of people, nature
and our economy. The number of days that Silicon Valley air
EXCEEDS STATE STANDARDS
exceeds ozone and particulate matter standards is an indicator
of air contamination.
Ozone is the main component of smog and vehicles are the
primary source of ozone-creating emissions. The health conse
I
\\
\
quences associated with fine particulate matter(PM10)are
more severe than those asociated with ozone. Fine particulate
matter — including dust, smoke and soot — is generated pri
marily during construction and burning wood.
HOW ARE WE DOING?
Silicon Valley exceeded the state standard for ozone 5 days in 2000,
down from 12 days in 1999. Silicon Valley exceeded the state
standard for particulate matter(PMIO)5 days in 1999, up from 3
days in 1998.(PMIO is sampled only every sixth day, so actual
1990
1991
1992
1993
1994
1996
1997
1998
1999
2000
I PARTICULATES
days over the state standard could be six times the number
shown, or 30 days.) Generally, levels of particulate matter have
1995
Source: Bay Area Air Quality Management District
been decreasing since 1990.
Water Use Increases by 9% in Two Years; Less than 2% Is Recycled
WHY IS THIS IMPORTANT?
Water is a limited resource because water supply is subject to
changes in climate and state and federal regulation. The quantity
and quality of water are essential to residents and to technology
manufacturing industries. Sustainability in the long term requires
that communities, workplaces and agricultural operations efficiently
use and reuse water.
HOW ARE WE DOING?
ACRE-FEET OF WATER USED
400,000
350,000
250,000
Santa Clara County's annual consumption of water increased in
200.000
1999 and 2000. Businesses, cities and households consumed an
estimated 376,000 acre-feet of water, a 9% increase since 1998.
150,000
Water use has increased 30% since 1991, a year noted for its low
100,000
rainfall, extreme water use reduction efforts and an economic
n
300,000
n
50.000
recession.
On a per capita basis, the county increased water use from 207
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
acre-feet per 1,000 residents in 1998 to 216 acre-feet per 1,000
residents, a 4% increase.
Less than 2% of water used is recycled water, up from 1% in
1998. Recycled water is used to irrigate parks and golf courses
and for construction.
Source: Santa Clara Valley Water District
LIVABLE
ENVIRONMENT
GOAL 5: PROTECT NATURE We meet high standards for improving our air and water quality, protecting and restoring the
natural environment and conserving natural resources.
Bad-Air Days Decrease
WHY IS THIS IMPORTANT?
DAYS PER YEAR THAT SILICON VALLEY AIR QUALITY
High-quality air is fundamental to the health of people, nature
EXCEEDS FEDERAL AND STATE OZONE STANDARDS
and our economy.
The number of days Silicon Valley air exceeds ozone standards
is an indicator of air contamination. Ozone is the main component
of smog and is created when volatile organic compounds and
nitrogen oxides are exposed to sunlight. Vehicles are the primary
source of such emissions.
HOW ARE WE DOING?
In 1999, Silicon Valley experienced one bad-air day as measured
against the federal ozone standard, down from three in 1998. The
region exceeded the stricter state standard 12 days, compared to
21 days in 1998.
1989
1990
1991
1992
1993
1994
CALIFORNIA STANDARD
1995
1996
1997
1998
1999
■■ U.S. STANDARD
Source: Bay Area Air Quality Management District
Health of Santa Clara Watershed Declines
WHY IS THIS IMPORTANT?
HEALTH OF SANTA CLARA WATERSHED DECLINES
The health of bays, lakes and rivers depends on the health of
their watershed, the land area from which all water drains, With
out careful planning, development, road construction and agri
culture can adversely affect watershed quality by contributing
sediment from erosion and by releasing contaminants such as
household chemicals, oil and debris from roads, and fertilizer and
pesticide runoff.
There are 14 major watersheds in the Santa Clara Basin, which
covers more than 50% of the land mass of the Silicon Valley region.
HOW ARE WE DOING?
The U.S. Environmental Protection Agency has developed a
composite rating of the Santa Clara Basin's overall watershed
health. Ratings range from one (the best) to six (the worst). In
1999, the rating for the Santa Clara Basin was revised downward
from four to five.
The most serious signs of weakness are high contaminant levels
in fish, water unfit for swimming, loss of wedands and impairment
of drinking water sources before treatment.
High potential for increased urban run-off and continued rapid
population growth make us vulnerable to future declines in
watershed health.
Sources: U.S. Environmental Protection Agency, Silicon Valley Environmental Partnership
GOAL 16: TRANSCENDING BOUNDARIES Local communities and regional authorities coordinate their transportation and land
use planning for the benefit of everyone. City, county and regional plans, when viewed together, add up to a sustainable region.
.1
Permit Streamlining Sets Stage for More Regional Collaboration
WHY IS THIS IMPORTANT?
Collaboration across government jurisdictions in Silicon Valley
requires developing innovative approaches to sharing information,
setting mutually beneficial goals and progressing together. This
indicator tells the story of how local jurisdictions have collaborated
to upgrade, standardize and link new approaches to permitting.
This experience sets the stage for future collaboration in areas
such as land use and infrastructure planning and management.
70%
50%
HOW ARE WE DOING?
A survey of 18 Silicon Valley cities found that 80% continue to use
the standardized Uniform Building Code amendments that were
developed during the mid 1990s jointly by municipal building
officials and the Joint Venture Regulatory Streamlining Council,
and that 45% use the recently developed standardized building
permit form. Sixty percent of local cities are participating directly
or indirectly in the Joint Venture Smart Permit Project with 45%
already offering web-based permitting.(Web-based services include
application submissions, payments, status tracking, information
sharing and citizen response.)
Ninety percent of cities have or are developing a Geographic
Information System for land use and infrastmcture planning,
infrastructure management, public safety and other municipal
services. The next challenge will be to Use the lessons from
the Smart Permit Project to ensure that municipal CIS data
is available for regional analysis and information sharing.
The 18 cities that participated in the survey include 84% of.
the Valley's population.
40%
10%
Use Unifoim
Participate
Use Standardized
Offers Web-Based
Has Geographic
Building Code
in Smart Pennit
Building Pennit
Permitting
Infoimation
Standard
Project
Form
Amendments
Source: Silicon Valley Cities
System
REGIONAL STEWARDSHIP
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY Valley cities, counties and Other public agencies have reliable,
sufficient revenue to provide basic local and regional public services.
Government Revenue and Capital Expenditures Catching Up with Economic Growth;
Revenue Sources Shift
GROWTH OF REVENUES AND CAPITAL EXPENDITURES OF SILICON VALLEY'S
CITIES COMPARED TO GROWTH IN POPULATION AND EMPLOYMENT
WHY IS THIS IMPORTANT?
To maintain service levels, local government revenues and expen
ditures must keep pace with population and job growth. This
indicator compares growth in the revenues and capital expen
ditures of Silicon Valley cities relative to growth in population
1.50
1.40
=
and employment.
1.30
HOW ARE WE DOING?
Growth in the combined revenue of all cities in Silicon Valley
has been catching up with population and employment growth.
1.20
S
1.10
Adjusted for inflation, total revenue increased 49% from flscal
year 1988 to 1998, from $1.3 billion to $2.0 billion. During this
period, demand for services, as measured by increases in popu
1.00
lation and employment, increased by 58%.
0.90
0.80
1988
1989
1990
1991
1992
I TOTAL REVENUE
1993
1994
1995
1996
1997
1998
CAPITAL EXPENDITURE
MB POPULATION AND EMPLOYMENT
Cities increasingly rely on other taxes (e.g., utility, hotel) and on
other revenue sources (e.g., fees) to stabilize and grow revenue
aligned with demand for services. Sales and property taxes do
not always track growth in population, employment and wealth.
In 1998, 70% of total revenues were based on sources other than
sales and property tax, compared with 63% in 1988.
REVENUE SOURCES FOR SILICON VALLEY CITIES
15%
Sales tax revenues are determined by retail expenditures and by
sales tax-generating commercial and industrial activities. Property
10%
taxes lag economic growth, and have actually declined by 1% in
real terms since 1988 because of Proposition 13 restrictions on
increases in assessed valuation.
22%
44%
19%
48%
In 1998, capital expenditures continued their upward trend
started in 1997. Between 1988 and 1996, annual capital expendi
tures of Valley communities did not keep pace with population
and employment growth, decreasing in real terms by 10% overall.
Since then, aggregate capital expenditures jumped.52%.
22%
1988
SALES TAX
20%
PROPERTY TAX
Source; State Controller's Reports
1998
I OTHER REVENUE SOURCES
I OTHER TAXES
Special Analysis: Silicon Valley's Digital Divide
By tracking a broad base of indicators that spans the economy, society and environment, the Index
identifies emerging issues facing the region. The 2000 Index reveals a growing Digital Divide in
Silicon Valley.
WHAT IS THE DIGITAL DIVIDE7
The Digital Divide is about more than connecting to the Internet; it is about connecting to opportunity
in the new digital economy. Silicon Valley's Digital Divide is the gap between different communities
in workforce, education, the economy and technology.
WORKFORCE GAP: Our current supply of skilled labor does not meet the needs of the high-technology
companies that fuel our region's economy. Joint Venture's Workforce Study, which was released in the
spring of 1999, identified a workforce gap of 31 to 37% of the high-tech industry demand for workers
in Silicon Valley. The cost of this workforce gap to high-tech industry is approximately $3-4 billion in
incremental hiring and opportunity costs.
WORKFORCE DEMAND OF HIGH-TECH INDUSTRY CLUSTERS
Workforce
Positions Filled By:
Gap
E Local Labor Force 63-69%
■ Commuters 16-18%
■ Outside Recruits 10-12%
■ Unfilled Positions 5-7%
Sources: A.T. Kearney Workforce Initiative Survey, Santa Clara Valley Transportation Authority,
Association of Bay Area Governments, Employment Development Department
EDUCATION GAP: On every measure of educational attainment in this year's Index, wide variation
exists by ethnicity. This is a particularly critical challenge for Silicon Valley, because low education
littainment afflicts our fastest-growing population, Hispanics, most extensively.
• Fifty-seven percent of Hispanic students graduate high school, compared with 86% of white stu
dents and 97% of Asian students.
• On average, 29% of ninth- and tenth-grade students were enrolled in Intermediate Algebra in
1999, up from 26% in 1998. Only 19% of Hispanics were enrolled.
• On average,47% of high-school students completed the course requirements for UC/CSU
entrance in 1998. Only 23% of Hispanic students met this requirement.
• Hispanics earn only 6% of engineering degrees awarded by local universities.
HIGH SCHOOL GRADUATION RATE, BY ETHNICITY,
SILICON VALLEY, 1998
100%
20%
111 i i i i
Asian
Filipino
White
PaciHc
Native
African
Islander
American
American
Sources: Alatneda, Santa Clara and San Mateo County Offices of Education
Hispanic
ECONOMIC GAP: In addition to gaps in our supply of skilled labor and educational preparation, the
region faces wide income disparity among different groups. There has been a widening income gap
during the 1990s in Silicon Valley. While incomes of the lowest 20% of households have increased
slightly the last two years, those incomes are still below 1992 levels (see page 18).
TECHNOLOGY GAP: Access to technology varies by race and income.
• In the San Francisco Bay Area,46% of people with household incomes less than $40,000 access
the lntemet compared to 81% with household incomes more than $80,000(Bay Area Council, 1999).
• Thirty-seven percent of Hispanics in the Bay Area use a computer on a frequent basis compared
to 59% of non-Hispanic Whites (Public Policy Institute of California, 1999).
BOTH THE NEW ECONOMY AND CHANGING DEMOGRAPHICS AFFECT THE DIGITAL DIVIDE
These gaps widen as the New Economy creates new skills demands at the same time that the demo
graphics of the Valley continue to change. As our population becomes more diverse, special efforts
are required to ensure that the Digital Divide does not continue to widen.
As we enter the year 2000, we cross an important demographic milestone: no racial/ethnic group is
a statistical majority. Anglos represent 49% of the combined population of Santa Clara and San Mateo
counties and only 39% of the school-aged population. Population projections point to increased diver
sity of our region as we advance toward 2010.
WE HAVE CROSSED A DEMOGRAPHIC MILESTONE
50%
40%
30%
20%
1995
1996
1997
1998
1999
WHITE %
2000* 2001* 2002* 2003* 2004* 2005*
wmi NON-WHITE %
1999 SCHOOL-AGED DEMOGRAPHICS REFLECT THE NEW SILICON VALLEY
■ White 39%
■ Hispanic 31%
■ Asian and PaciHc Islander 26%
□ African American 4%
■ Native American 0.2%
Source: Department of Finance
♦Projection
IMPLICATIONS FOR SILICON VALLEY
Joint Venture believes that Silicon Valley's continued economic and social vitality is dependent on
our ability to prepare more people in the region for the demands of the new workforce, whether in
high tech or other fields. This is the challenge that will be the focus of Joint Venture's work as we
explore ways to enable all people in Silicon Valley to succeed in the new Digital Economy.
©
One New Home for Every 19 NeW Jobs in South San Mateo Region
WHY IS THIS IMPORTANT?
RATIO OF NEW JOBS TO NEW HOUSING STARTS
Building housing commensurate with job growth helps mitigate
commute traffic, moderate housing price increases and ease
BY SUB-REGION (jUNE 1998-jUNE 1999)
workforce shortages.
HOW ARE WE DOING?
In 1999, an estimated 7,831 housing units were built in Silicon
Valley. This number is lower than the 11,105 units built in 1998.
Multi-family housing was 49% of total starts.
In 1999, the ratio of new jobs to new housing was approximately
3 to 1, because of a slowing in job growth. Since 1992, the Silicon
m
Valley region has added more than 275,000 jobs and created 54,600
housing units(5 jobs for every 1 housing unit.)
Part of what causes commute traffic is the structural imbalance
in the creation ofjobs and housing within Silicon Valley's six
major subregions. Between June 1998 and June 1999, for example,
the southern San Mateo County region produced 19 jobs for
every one housing unit. Southwest Alameda County and South
Santa Clara County produced four jobs and three jobs for
every one housing unit. North and Central Santa Clara County
generated two jobs for every one housing unit.
■■SOUTH SAN MATEO COUNTY 19:1
■■ SOUTHWEST ALAMEDA COUNTY 4:1
■■ SOUTH SANTA CLARA COUNTY 3:1
^3 NORTH SANTA CLARA COUNTY 2:1
CENTRAL SANTA CLARA COUNTY 2:1
nnascoTTS valley 0:1
Sources: Construction Industry Research Board, Employment Development Department
srEviML ARALTSIS: SILICON V A L CE T A N D THE BAY AREA
u
20% OF SANTA CLARA COUNTY'S WORKFORCE LIVES OUTSIDE THE COUNTY.
UP FROM 16% IN 1990
The number of workers commuting into Santa Clara County from surrounding counties increased from
144,000 in 1990 to 212,000 in 2000 — a 47% increase. The commuters' share of total employment in
Santa Clara County increased from 16% in 1990 to 20% in 2000.
Though the absolute number of commuters increased markedly, the shifts in the home counties of
the commuters were only slight. The largest share of commuters,48%, live east of Silicon Valley —
the same as in 1990. The share of commuters from the Peninsula and points north declined from 36%
to 32% between 1990 and 2000. The share of commuters from the west increased from 12% to 15%.
The share from San Benito and Monterey Counties increased from 4% to 5%.
ORIGIN AND NUMBER OF COMMUTERS INTO SANTA CLARA COUNTY
Source: Metropolitan Transportation Commission; Center for Urban Analysis
IMPLICATION
While Tri-Valley,- Santa Cruz County and San Francisco have developed significant concentrations of
technology jobs, the greatest concentration of such jobs still remains in Silicon Valley.
Because 80% of the workforce lives in Santa Clara County, education and training of our residents
remain key to future success.
©
I HCLUSIVE
"■'j- 'r V' '
r^
SOCI ETY
More Students Completing Courses for College Entrance
WHY IS THIS IMPORTANT?
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE REQUIREMENTS
Passing a breadth of core courses required for college entry is a
measure of achievement, capacity and readiness. Completing some
type of education beyond high school is increasingly important
for participating in the high-wage sectors of the Silicon Valley
economy. A Joint Venture survey of the region's fastest-growing
companies found that 84% of positions require education or
50% ■
training beyond high school.
10%
HOW ARE WE DOING?
The share of high school students who complete the courses
required for entrance to the University of California (UC) or
California State University (CSU) systems increased from 43%
null
1992-93
1993-94
1994-95
1995-96
■■ SANTA CLARA COUNTY
1996-97
1997-98
CALIFORNIA
PERCENT OF STUDENTS COMPLETING UC/CSU COURSE
in 1997 to 47% in 1998. Silicon Valley compares very favorably
REQUIREMENTS, BY ETHNICITY, 1997-98
with the state average of 33%.
70%
The number of students completing the requirements in Silicon
Valley has steadily increased since 1994 when only 36% of students
50% —
met the standard.
30%
Performance, however, varies widely by ethnicity. Only 23% of
Hispanic and 22% of African-American students completed these
EfetjEt
courses in 1998, compared with 66% of Asian students and 47%
of white students.
White
Asian
Filipino
Native
Pacific
American
Islander
—
Hispanic
African
American
AVERAGE 47%
Source: California Department of Education
i
T*-*
3
* "
Kit r
t
*
Ki
IKeilUSIVE SOCIETY
11: TRANSPORTAT ION CHOICES We overcome transportation barriers to employment and increase mobility by investing
in an integrated, accessible regional transportation system and other alternatives to driving alone.
Transit Ridership Per Capita Shows No Change
WHY IS THIS IMPORTANT?
People want more choice in how they get to work, to school or
to mn errands. A greater percentage of workers using alternatives
NUMBER OF RIDES ON REGIONAL TRANSPORTATION SYSTEM,
SANTA CLARA .AND SAN MATEO COUNTIES, PER CAPITA
to driving alone indicates progress in increasing access to jobs
and in improving the livability of our communities. Pedestrian-
and transit-oriented development in neighborhoods and employ
ment and shopping centers increases opportunities for walking,
bicycling and using transit.
HOW ARE WE DOING?
Per capita ridership on public transportation did not change in
1999, remaining at 33.5 annual rides per person. Total ridership
31
^^^^^
30
^^^
ifii
i|ii
1990
1993
1994
1991
1992
^
^^
^^
1995
1996
1997
SHARE OF SILICON VALLEY COMMUTERS USING
increased 2%, from 80.5 million in 1998 to more than 81 million
in 1999, but population increased at a similar rate.
VARIOUS COMMUTE MODES, 1999
Ridership increased on light rail, Caltrain and VTA buses, but
■
has decreased on SamTrans buses by 11% since 1994.
Drive .Alone 79%
■ Shared Ride 15%
.A 1999 survey of Valley commuters found that 79% drove to work
■ Transit 4%
alone, 15% shared a ride, 4% used transit and 1.5% walked or
hiked to work. The share of commuters using transit has increased
13
Walk/Bike 1.5%
from 2.8% in 1990. Carpooling also increased from 12.4% in
■
Other .5%
1990, facilitated by a nearly complete system of high occupancy
vehicle (HOV) lanes.
1998
Sources: Valley Transportation Authority, SamTrans, Altamont Commuter Express,
RIDES for Bay Area Commuters
♦Estimate
1999*
The Silicon Valley HousingiCrisis
With Santa Clara County vacancy rates falling
to a three-year low of1.1 percentin 2000^, apart
mentrental costs have soared by 61 percent over
the last three years^. As a result, today nearly
90,000 Santa Clara County renters pay more than
response. The Section 8 housing assistance pro
gram,offers low-income families below marketrate housing. Eleven thousand families in Santa
Clara County,including 7,400 households in San
Jose,currently receive public housing assistance.
When a waiting list for Section 8 voucher assis
tance was opened in 1999, 27,000 added then-
30 percent oftheir income in rent while at least names. Since then the list has been closed and
43,000 renters pay more than half of their in no new families are being added. The San Jose
come in rent®.
Housing Authority officials expect only mini
mal increases in the number of vouchers to be
Additionally,as a result ofrecent price increases made available to this region in the future.
for electricity and natural gas, many low-income
families now face a choice between paying their The Real Impact
rent or their utility bill. In January 2001,15,000
Marcella J., 29, recently emigrated to the United States, works
area Pacific Gas & Electric customers lost their
electricity: a 15 percent increase from January
oflast year. Electricity costs, which previously
accounted for 7 to 15 percent of a low-income
monthly family's budget now claim between 17
and 45 percent'".
ai a fast food restaurantfor$488 amonth. Her husband,"a
construction laborer, may average $1,000 a month. Because
their small, two-bedroom apartment in a run-dovyn complex
costs $1,225 a month, they live.with their two children in one
bedroom and rent outthe other bedroom to four men, who
also work. "I never:thought it would'be as hard as it is," said
Notwithstanding the soaring demand for afford
able housing, the major federal housing assis
tance program has failed to offer an adequate
Juarez, who is worried aboutcrime in-her neighborhood as
well as how to pay. her bills."Everybody talks about how
wonderfulit is in America,,but it's not been easy;'"
"While Silicon
Valley today
remalnsa
showcase for the
New Economy's
successes. It Is
However,the Section 8 program in Silicon Val
ley suffers firom even greater flaws. Neither the
housing certificates nor vouchers offered by the
program provide adequate rental payments in
markets where housing is scarce. For example,
a Section 8 certificate will pay no more than the
difference between a "fair market rent"(FMR)
that is established by the U.S. Department of
Housing and Urban Development and 30%(or
also plagued by
Its shortcomings"
Silicon Vailey^s
Housing Crisis
WORKING PARTNERSHIPS USA i
EVERYONE'S
VALLEY
in some cases 40 /^) ofthe renter's income. As ing a home oftheir own has become more eluof January 20017the FMR for a two-bedroom sive than ever'^
apartment in the county was $1,481". This
amount is well below average rents for units of From 1997-2000, median home prices in Santa
that size in Silicon Valley.As a result, apartment Clara Coimty skyrocketed from $311,146 to
owners have little incentive to accept Section 8 $513,950: an increase of 65%*'*.
certificates until their vacancy rates increase.
Section 8 vouchers, while more popular, also
TheReallmpact
have significant limitations. With a Section 8
voucher, the Housing Authority sets a payment
'-ilOTOFKing in several commtggG
ames M 28
standard to calculate the amount ofrental assis
"When a waiting
tance paid. The family pays the difference be
was forced to turn to a temporary ho
tween that standard and the rent they can find.
agency which founa him a stockroom job
listfor Section 8
There is no cap on rent or on family payment. If
As a temp he earns much less than the
voucher
the payment standard is too low, those with
full-time worker he replaced and his job
assistance was
vouchers may still pay more than they can af
provides no health insurance He has to Jfj-
opened in 1999>
ford.
and weekends askl/v.aiteitf§
27,000 added
their names.
Since then the list
has been closed
In addition to the weaknesses in the Section 8
program, there are also threats to affordable
friend.
rental housing built iu the San Jose area decades
ago with federal assistance.
and no new
families are
Many ofthese housing projects received public
being added."
subsidies in exchange for an agreement to offer
below market rate rents for 30 years. Once that
he has
-rr
deadline has been reached, owners are permit
ted to raise rents to market levels.In Santa Clara
County,9,074 units are in danger ofconversion
to market-rate in the near future".
T't
Silicon Valley's housing crisis doesn't end with
its costly rental housing market: that's only
where it begins. Home ownership is valuable in
promoting neighborhood stability and helping
low-income familiesjoin the middle-class.How
ever, for low-wage workers, the dream ofown-
WORKING PARTNERSHIPS USA:
Policy Briefs:Silicon Volley Equity Series
Silicon Valley's
Housing Crisis
112
BS
'
PROGRESS MEASURES FOR SILIC0N
VALLEY 2 010
Silicon Valley 2010 Goals
'irN-DRiA^s V-x i i:-'tyjlODJJCTjyJTY iAND RROADENS PROSRERITY V
GOAL 1: INNOVATION AND ENTREPRENEURSHIP.
>
P®DRiE;-TrB:^DPRBRTBNI3^J5ES>^
GOAL 10: EDUCATION AS A BRIDGE TO OPPORTUNITY.
Silicon Valley continues to lead the world in technology
All students gain the knowledge and life skills required
to succeed in the global economy and society.
and innovation.
GOAL 2: QUALITY GROWTH. Our economy grows from
U R Jl NCUUS IVJE S0.CI£TY,£0;N!NIOrS^lM'5^
GOAL 11: TRANSPORTATION CHOICES. We overcome
increasing skills and knowledge, rising productivity and
transportation barriers to employment and increase
more efficient use of resources.
mobility by investing in an integrated, accessible regional
transportation system.
GOALS: BROADENED PROSPERITY. Our economic
growth results in an improved quality of life for lower-
GOAL 12: HEALTHY PEOPLE. All people have access
income people.
to high-quality, affordable health care that focuses on
disease and illness prevention.
GOAL 4: ECONOMIC OPPORTUNITY.. All people,
especially the disadvantaged, have access to training
and jobs with advancement potential.
GOAL 13: SAFE PLACES. All people are safe in their
homes, workplaces, schools and neighborhoods.
GOAL 14: ARTS AND CULTURE THAT BIND COMMUNITY.
OUR COMMUNITIES PROTECT THE NATURAL
Arts and cultural activities reach, link and celebrate
ENVIRONMENT AND PROMOTE LIVABILITY
the diverse communities of our region.
GOALS: PROTECT NATURE. We meet high standards for
OUR REGIONAL STEWARDSHIP
improving our air and water quality, protecting and restoring
the natural environment and conserving natural resources.
GOAL 6: PRESERVE OPEN SPACE. We increase the
DEVELOPS SHARED SOLUTIONS
GOAL 15: CIVIC ENGAGEMENT. All residents, business-
amount of permanently protected open space, publicly
accessible parks and green space.
GOAL 7: EFFICIENT LAND REUSE. Most residential and
people and elected officials think regionally, share respon
sibility and take action on behalf of our region's future.
GOAL 16: TRANSCENDING BOUNDARIES. Local com
commercial growth happens through recycling land and
buildings in existing developed areas. We grow inward,
munities and regional authorities coordinate their
transportation and land use planning for the benefit
not outward, maintaining a distinct edge between
of everyone. City, county and regional plans, when
developed land and open space.
viewed together, add up to a sustainable region.
GOALS: LIVABLE COMMUNITIES. We create vibrant
GOAL 17: MATCHING RESOURCES AND RESPONSIBILITY.
community centers where housing, employment, schools,
Valley cities, counties and other public agencies have
places of worship, parks and services are located together
reliable, sufficient revenue to provide basic local and
regional public services.
and are all linked by transit and other alternatives to
driving alone.
GOAL 9: HOUSING CHOICES. We place a high priority
on developing well-designed housing options that are
affordable to people of all ages and income levels. We
strive for balance between growth in jobs and housing.
©
SANTA CLARA COUNTY HOUSING TASK FORCE:
AFFORDABLE HOUSING
prepared by:
Susan Silveira
Springboard Consulting
Affordable Housing
State of Cailfomia
Why a Housing Crisis in California?
1. Between 1990 and 1999, buildup permits were issued for an average of 110,581 units
of housing each year. In contrast, permits were issued for an average of215,585 units
per year during the 1970s and 203,369 units per year during the 1980s.'
Housing Units by Permits issued in the State of
Caiifomia
250,000
•
200,000
150,000
100.000
50,000
0
1970-1979
1980-1989
1990-1999
Multifamily housing accounts for the majority of the State's production gap,
particularly housing that is affordable to lower income families. During the 1980s,
for exart^le, Caiifomia added an average of91,682 units of multifamily housing per
year, 45 percent ofthe new housing built. Between 1990 and 1999, the State added
an average of28,089 units per year of multifamily housing,just 25 percent oftotal
housing built during the decade and a 69 percent drop from the levels ofthe 1980s.^
Multi-Famtly Housing Units Built Per Year in Caiifomia
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1980-1989
1990-1999
'"FurthCT ConcOTis R^arding the Low-Inccwne Housing Crisis in CalifOTnia' by Radha Bhattacharya,
Dept. of EcOTomics, California State University, Fullerton April 2001
^ "Further Concerns Regarding the Low-IncOTie Housing Crisis in California' by Radha Bhattacharya,
Dept. of EcOTiOTiics, Caiifomia State University, Fullerton April 2001
2. California's system oflocal government finance limits the amount ofrevenue
generated by housing and encourages local communities to fevor sales tax generating
retail development over residential or other forms ofcommercial development.^
3. The proportion ofeligible households receiving assistance is lower in Cahfomia than
in the nation as a whole. California received fewer Federal housing assistance dollars
in 1999 for each individual living below the federal poverty level than all but one of
the ten largest states. While the Federal government spent on, average, $286 on
housing assistance for each person in poverty, Cahfomia received only $171 per
person in poverty."^
4. A significant firaction ofCalifornia's affordable housing stock is at risk ofconversion
to market rate housing. In the past three years, California has lost more than 15,000
affordable housing units to opt-outs and prepayments, a total of11 percent ofthe
Federally assisted inventory, with most ofthe losses occurring in Los Angeles,
Orange, San Diego, and Santa Clara Counties. The State's Housing and Community
Development Department estimates that more than 180,000 units may be at risk of
conversion from affordable to market rents over the next decade.^
5. Over the last decade, Cahfomia has gone fi-om being a leader ofinnovative state
housing pohcy to a laggard. Among the State's signature initiatives were creation of
the first state housing trast fund in 1985, creation ofa state supplement to the Federal
low-income housing tax credit in 1987,and passage ofthree affordable housing
bonds in 1988 and 1990.^
6. State housing spending dropped substantiaUy during 1990s fi'om 0.7 percent oftotal
spending in 1990-91 to 0.2 percent oftotal spending in 1999-00.^
7. Job growth has exceeded housing growth in nearly every part ofthe State since the
economic recovery began in eamest in 1994. The number ofnew jobs exceeded the
number ofnew housing units in all but 12, primarily rural, Cahfomia counties
between 1994 and 1998. The State as a whole added 3.9jobs for each new unit of
housing, more than twice the 1.5-to-l ratio recommended by housing pohcy experts.^
^'Turther Concerns Regarding the Low-Income Housing Crisis in.California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
"Ibid.
^Ibid.
® 'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, Fullerton April 2001
'
Ibid.
*'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State UnivCTsity, Fullerton April 2001
California Spends Less on Housing than Other Major States
California's commitment to alBfordable housing is substantially less than many other states,
in both absolute terms and as a share oftotal state spending.
■ California is one of33 states with housing trust funds. Trust funds provide a dedicated
source offunding for housing programs. California's fond receives a $2 million per year
alloeation from the proceeds ofoil lease payments on state tidelands, less than the initial
$5 million allocation made in the mid-1980s.
■
Overall, Califomia allocated $109.6 million for housing programs in 1999-00, including
$40 million in limited term assistance to the School Facilities Fees Assistance program
and $33.5 million in Low Income and Farmworker Housing Tax Credits. Other states
with much smaller populations spent significantly more:
• Florida. With less than halfthe population of California, Florida allocated $149
million for housing programs for low and moderate ineome families in 1999-00. The
primary somce ofsupport for Florida's housing programs comes from a documentary
stamp tax levied on real estate transfers. This tax provides an ongoing source ofsupport
for Florida's housing trust fimd, including $146 million in 1999-00.
• Massachusetts. In 1998-99, Massachusetts allocated $187 million for housing. Major
program initiatives include $31 million in state support for publie housing authorities,
$39 million for rental assistance programs, and $71 million for capital investments.
• Illinois. Illinois supports its housing trust fund with a dedicated real estate transfer tax.
The tax raised $21 million in 1998; a sum that exceeds California's supportfor similar
programs targeted at low and moderate incomefamilies.
• Washington. With a population one-sixth as large as California's, Washington state's
housing spending is comparable to that ofCalifomia. The centerpiece ofthe state's
expenditures is a housing trast fund fopported by a combination ofdedicated revenues
and appropriations from the state's capital budget. The fund provided $62 million in
support for housing constraction and preservation programs during the state's 1999-00
biennium, plus $5 million for homeless families and $8 million for fermworker housing.
• New Jersey. New Jersey allocated $48 million in state support for housing programs
in 1999-00. Ofthis amoimt,$29 million eomes from a dedicated real estate transfer tax
that provides an ongoing source offunding for the state's affordable housing programs.
• Oregon. Oregon, with a population of3.3 million, allocates interest earned on renters'
security deposits to a trust fimd used to support low income rental housing. In 1997-98,
the fimd received $4.5 million, approximately equal to California's multifemily housing
spending in the current budget year.^
'Locked Out: California's Affordable Hoiising Crisis. Califomia Budget Project May 2000
Support Provided Through the Tax Code Favors Higher lucome Households
The structure ofthe tax preferences available for homeownership fevors high-income
households by allowing taxpayers to claim deductions not only on their primary
residence, but also on second homes. The tax code also allows deductions for interest
payments on mortgages ofup to one million dollars, far in excess ofthe amount needed
to finance an average priced home. The bias toward higher income households is greater
since low to middle income Califomians pay little or no state income taxes and thus
receive minimal if any benefit fi-om the deductions claimed by higher income ta3q)ayers.'°
In 1999-00, home mortgage deductions reduced state tax collections by an estimated $2.9
billion. Property tax deductions and the preferences for capital gains associated with the
sale ofa home cost the state $590 million and $790 million in lost revenues, respectively.
In 1998, nearly half(48 percent) of all mortgage interest deductions were claimed by the
eight percent oftaxpayers with incomes in excess of$100,000. The capital gains
preferences benefit an even narrower high income bracket, with 85 percent being claimed
by house holds with incomes over $100,000. In contrast, the state's one broad-based tax .
preference for renters, which was eliminated between 1993 and 1997, cost an estimated
$140 million. At $60 for single taxpayers and $120 for families, the benefits are modest
in comparison to those available to those who own their own homes. Finally, the state
finances a property tax exemption on the first $7,000 ofthe value ofa home."
\
High Housing Costs Have Pushed Homeownership Out of Reach for Many
California Families
Despite a booming economy, California's homeownership rate is the second lowest in the
nation. Only 55.7 percent ofCahfomia households owned their own homes in 1999,
compared to 66.8 percent for the nation as a whole.*^
The state's homeownership rate is low because fewer Califomians can afford to buy a
home. Nationally, 55 percent ofhouseholds could afford to purchase the median priced
home in 1999, as compMed to 37 percent of California households. Only 27 percent of
the region's households can afford the median priced home in the Bay Area, and even
fewer(23 percent) can afford the median priced home in Monterey County. The median
California household earns less than two-thirds the income needed to purchase the
median priced home.'^
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
"Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Hou«ing Aff«id«liifty in CdifornMW W»tl D«lowlh«Nali»n4d Awiog*
UrttadSdMa
43>.
»T*
»TV
CdMii^a
\
IM4
liM
lUI
«i
tMrs
i«eo
;«ii
lifc:
CiriiotnU'te HoiiMOwnoiship R4t«s
aftTH
iw I
:«!•
tosti
'iMJ
liU
loan
Tlios*of tfao N^lloii
«■>»
f
I
J
i
*
'-;:A
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+H
\
\
\ \ \
\
V\
%
California's low-income homeowners experience significant housing cost burdens. Over
half (54 percent) of the low-income homeowners in the state's metropolitan areas spent
over half of their income for housing in 1997.
California's high home prices make it difiBcult for renters to become homeowners. The
income needed to purchase the median priced home is more than twice the income of the
state's median renter household ($27,401 in 1998). Fewer than one out of twenty new
homes sold in 1999 were affordable to households with incomes at or below the median
for California renter households.
Housins Affordabllhy Vaiies Widely Across CciHfomla
^ MK • •
«
-
rv
,
MS
/y//./
1--4
// ^///
<F
Low Income Renters Face the Largest Challenges
Aflfordability problems for renters become more severe as incomes decline. Nearly twothirds(65 percent) oflow income renters in the state's metropolitan areas paid more than
halftheir income for housing in 1997 and 86 percent spent over the recommended 30
percent oftheir income on housing. The rent burdens faced by low-income households in
the seven California metropolitan areas covered by the Census Bureau's American
Housing Survey all ranked within the top 12 ofthe 45 metropolitan areas surveyed during
the mid-1990s.''*
The number of Califomians in need ofaffordable housing far outstrips the supply oflow
cost units. In 1997, the number oflow-income renter households in the state's
metropolitan areas exceeded low cost rental units by 2.1-to-l, a
of684,000 units. In
Orange County, low-income renters outnumbered low cost rental units by more than 4-to1. In Los Angeles County, the number of low-income renters exceeded the number oflow
cost units by 2.3-to-l.'^
Locked Out: California's AffOTdable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. CalifcHTiia Budget Project May 2000
TaMe2: Low tiicoino Rontw* Oulnumboi AliofdalrloUnits in Csifoinia
Ratio of I ow
MeUopolildi) C dSrorriia (1997]
Number
Number «f
Shofta^al
Income
of Low
Law Cost
Lew Cost
Renters to
Income
Kenlal
Rental
Low Coot
Renters
Unrts
linils
Units
1 287.400
603.400
684 200
2.1-ti>l
555G0
1220O
436C0
4 6-10-1
sasiloo
237 200
301.400
2.3-to-1
17JDD
2.3-to-1
62,700
2.3-t!>1
AnaheimSarf6 Aia
1.05 Aflgele^^Long Beach
(1997]
Oakland (13'JBi
(199 a]
34^00
uom
Siicramtf^ (1996)
San Diego(1394]
San Francisco (l9E)a)
472D0
56200
272D0
29CC0
2.1-tD-l
112200
sosno
615OO
2 2-riv1
752OO
39.400
35JB00
■"i.HJCi
1.9-to-l
2 3-t!Vl
Low nemo ncrtrfAor? drirpriar N»5P v«h iruscrhstrmiror iiywS1S,i.l1Cu«r '/w Low eo< irrW .rttriiie
fro* fr flficrt io'l''.-'sihBnS4UC: prr mpflh
SLUrc«. wSr>«u«!tf «>tvrt.rr'«r.«.dJ«KUO:fr«C«i'«;«,
Devsicpnen!. w sr an ^ouaro i. jse <e
Market Rents are Higher than Fair Market Rents
Many public programs use Fair Market Rents (FMRs) as a measure of housing costs.
FMRs are published annually by the federal Department of Housing and Urban
Development (HUD). FMRs are used to determine the maximum subsidy that can be
provided through the Section 8 and a number of other federal housing programs. FMRs
estimate the cost of rent and utilities, other than telephone service. FMRs are currently set
at the 40^ percentile within an area. In other words, the FMR is the cost below which 40
percent of the housing units in an area would rent for less and 60 percent would rent for a
higher amount. FMRs are based on the rents paid by households that have moved within
the past 15 months.'^
The California Budget Project compared 1999 FMRs to survey data produced by
REALFACTS, a widely used private database research service, for September 1999. The
FMR for a two-bedroom unit was below the market rent in 12 of the state's 16 largest
counties. In Los Angeles County, the difference was significant. The 1999 FMR for a
two-bedroom unit was $749, while in September 1999 the average rent for an apartment
with two bedrooms and one bathroom was $881, a gap of $ 132 or 18 percent. Among the
12 counties where market rents exceeded FMRs, the disparities for two bedroom
apartments ranged fi-om a low of 4 percent in San Joaquin County to a high of 75 percent
in San Francisco. In recognition of the gap between the FMRs and market rents, HUD
recently made a special adjustment to the 2000 FMR for San Francisco.'^ This adjustment
increased the FMR for a two-bedroom unit fi"om $1,362 to $2,043.
The disparity between FMRs and market rents is important. When FMRs are significantly
below market rents, recipients of Section 8 certificates, which can be used to rent a unit in
Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
" Locked Out: CalifOTnia's Affordable Housing Crisis, California Budget Project May 2000
the private market, have a difficult time finding a landlord willing to accept their
certificate. In areas with particularly tight rental housing markets and rapidly escalating
prices, FMRs are likely to underestimate the amount families must pay in order to rent an
apartment and underestimate the level of assistance needed to make housing affordable.
I ar MarKAi
as c ompafM] m Wirtwi H^nrs
l air
sapifttiiha*
Mdikei
1999
Market
ctJiJNiy
Aomcdi
Kwri
Ji .CI&&
5953
592
ssoe
54SO
iciri
5515
1505
KifD
6981
6152
1900
569
seo
13%
1703
11C6
ie%
$729
1019
590
15%
51.167
12.1:^3
f8^
76%
5S9;
1617
525
11.391
1227
Riv^rsio©
S597
1677
^ncroTTierto
5551
1039
Sen BerrsidinD
sen MEieo
SHila BirtPlKei
S'viin Cmro
F^ieairace i^iember
bitfefence
«sei
sari
SiMi Prsrclsoo
Peicentage
Sfeei
Lo«
1S»fi IMrcd
Dola
DMereric*
51.167
t"95
11%
•15%
0%
4%
10%
5BTB
1816
«<a2)
-7?fe
51.139
11.330
1131
1?%
5793
191?
5139
1R%
u$ QeeeeTieitelltousreandUrtart DeKei^nteiS
California is currently home to eight ofthe 10 most expensive metropolitan areas housing
markets in the country. The median home price in the State is more than $100,000 higher
than the national median and almost half of California renters cannot fair-market rent on
a two-bedroom apartment.'^
The metropolitan areas with the most severe affordable housing crisis in Califomia-when
viewed on the national scale-are Marin County, San Francisco County, San Mateo
County, Santa Clara County, Orange County, Oakland, San Luis Obispo, Santa CruzWatsonville, Santa Barbara, Los Angeles, Vallejo-Fairfield-Napa, Stockton and Ventura.
The counties with the greatest projected growth in terms ofaverage annual housing
construction need are: San Diego County, Los Angeles County, San Bemadino County,
and Riverside County.'^
Controller's Quarterly: Housing in California, Spring 2001
"Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. of EcOTomics, California State University, Fullerton April 2001
Statewide, we will need almost one million housing units in the next five years, but we're
not producing even halfofthat.^^
Demand for Federally Assisted Housing is Intense
CMnh»4
Lost moMMe Unis*
T«<dl UiiiK
A recent survey oftwenty local housing authorities found 371,740
families were on waiting lists for Section 8 assistance, more than
three times the 104,133 families receiving assistance.'®^ The
survey found 93,632 families wait listed for 25,268 units of public
housing. Moreover, actual demand for housing assistance may be
much higher since many agencies periodically close waiting lists
to new applicants and some hold lotteries to determine who will be
allowed access to the waiting list. The Alameda County Housing
Authority, for example, received 15,000 applications for assistance
when it opened waiting lists for assistance in August 1999. The
Agency then held a lottery to reduce the number offamilies that
would be added to the waiting list to 3,000.^'
As a result, thousands offamilies languish on waiting lists for
federally supported housing assistance. In the City ofLos Angeles,
155,000 names were on the waiting list last year for Section 8
housing assistance; 35,000 families currently receive assistance.
There were more than 11,000 femilies on the waiting list for public
housing, with the largest demand for three and four bedroom units.
In Fresno, 12,000 families are on the Section 8 waiting list and
housing authority officials estimate that the average wait for
assistance is four to five years.^^
CowMy
Lost
an
.f^iamedB
BJLe
IDS
Mmra cceia
212
Dial None
50
liXl
El Dots bo
Dlenri
10
knpecial
44
4%
Kern
S,394
Lwi
Mefwd
50
IT
Ne>-8da
BO
Dr-jiee
1.012
Placw
164
Rwwsae
657
Sexraimertj
80O
ssnBerrarano
078
UB2
SsmDi^W)
Ban F ranti4£o
12B
StinJoaaan
66
2Etl
Ban Uatao
1.7B4
s<anc<H C^fii
Barta Ciie
78
BO
sroiaia
Loss of Federally Subsidized Housing Threatens to Shrink
Supply of Affordable Units Further
317
SDHufre
78
Btanisiaus
Over the past three decades, the federal government has provided
assistance to developers of affordable housing in the form of
guaranteed rental payments and low cost financing in exchange for
a commitment that rents would remain affordable.'®"' This
arrangement assured property owners rents sufficient to pay debt
service and operating costs and provided sorely needed housing for
low income femilies. ^
142
lUisrii
64
211
Ventu'a
95
Void
1&.tiB4
TO lAl. JFJiTfT
C^siViriii
P«i(Fi«nl<p
Many ofthe projects built with federal assistance are reaching the expiration dates of
their contracts to maintain affordability, putting a significant fi-action of California's
20
Affordable Housing-Bridging the Gap" by Jan Breidenbach, Controller's Quarterly Spring 2001
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
^ Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
afifordable housing stock at risk ofconversion to market rate housing as landlords allow
these contracts to expire. Moreover, in 1996 Congress restored the rights ofowners to
prepay their HUD-assisted mortgages, giving property owners in areas with rising rents
the ability to refinance and convert to market rents. In the past three years, California has
lost more than 15,000 affordable housing units to opt-outs and prepayments, a total of 11
percent ofthe federally assisted inventory, with most ofthe losses occurring in Los
Angeles, Orange, San Diego, and Santa Clara Counties.
What Types of Subsidized Units are At Risk?
Several federal programs provide assistance to affordable housing developers in exchange
for a commitment to maintain affordability. Assistance received by developers of units
currently at risk ofconversion to market rents includes:
• Below market interest rates ranging fi-om one to three percent and mortgage insurance in
exchange for 20-year affordability commitments. As of May 1998, approximately 15,000
units were eligible to convert under the prepayment rights enacted by Congress in 1996.
• Project-based subsidies under the Section 8 program whereby the federal government
committed to subsidize rents for 15 or 20 years. Under the Section 8 program, tenants pay
no more than 30 percent oftheir income for rent. The average income of California Section
8 participants is approximately $10,000 per year and over 40 percent ofthe program's
participants are elderly or disabled. Nearly 100,000 units are at risk of conversion over the
next six years.
• Housing financed with the proceeds oftax-exempt bonds. California, like other states,
issues tax-exempt bonds to finance housing construction. Most ofthe housing financed by
tax-exempt bonds serves a mix ofincomes, placing these units at particular risk for
conversion. Approximately 28,000 units of bond financed housing are at risk of conversion
to market rents.
The state Department ofHousing and Communitv Development(HCD)estimates that
more than 180,000 units may be at risk of conversion fi-om affordable to market rents
over the next decade. Already, some units judged at low risk of conversion based on the
type ofsubsidy received, location ofthe property, and owner, have been converted to
market rate rents. Without governmental action, property owners are likely to convert
these units to market rents over the next few years, displacing existing tenants who will
be unable to shoulder the burden ofsignificantly increased rents.^^
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
^ Locked Out: California's Affordable Housing Crisis, California Budget Project May 2000
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
10
AffoiddbU Unlr« Ai Rfek in Caiifoinid
suit
Rtj'A'i'A
<"■ rV.
'iwrTH
ijTr.v
fimjl-fltic
>:■*■■■:
s^frr
'f.-tfr
Cjjf.t
'i.yjr"-ri'i
vtnDi^ft
fSfrt
0.krT>
4K] LB|
Homeless
By definition, the homeless face the most severe housing crisis. The state Department of
Housing and Community Development (HCD) estimated that 361,000 Califomians, just
over one out every hundred (1.1 percent), were homeless in 1996-1997. Most of the
state's homeless are concentrated in Los Angeles, San Francisco, Sacramento, and the
Central Valley region. One out of every twenty-five residents of San Francisco (4.0
percent) was without a home in 1996-97.
Ciklifoinid R«««}vw L«»6 f odotdl Housing Acvfeldnce Pot Pms«ii In
Poverty Titan ARbut One of the Ten i aigeei Stateo
^tciU
M»w<r
UnuM wwi
ana-ji.
tat
Mtr
j to*
1 »•>*
SB*
luin
tir»
Faliial*ki««lr«Aa»l>l«aaeiviruaH<«
Pincti k<
QB
iLu iTJir
11
Strategies
In her Spring 2001 Quarterly Report, State Controller, Kathleen Connell States:
With an annual deficit ofabout 100,000 units per year and only one
home being created for every 3.5 new jobs in the State, California's
housing situation poses a,real and immediate threat to the well being
ofCalifornia's otherwise healthy economy. The solution to this problem
will have to be multi-faceted. At the local level, we will need zoning
and land-use policies that accommodate more housing and higher densities.
We will have to take back slum housing for rehabilitation into decent
and safe housing that will revitalize our blighted communities. We will
need to fund the production ofaffordable units and e3q)edite the
coiistruction of market-rate housing. Finally, we will need meaningfiil
reform ofour State fiscal system that disincentivized local governments
from building housing for over twenty years.
California Needs a Renewed Commitment to Affordable Housing
Public policies — af all levels ofgovernment — can play a significant role in addressing
the state's current housing crisis:^^
/
■
Increase the Federal Government's Commitmentto Housing. A renewed federal
commitment to affordable housing including additional financial support is essential
to solving California's housing crisis.
■
Use Existing Resourcesfor Affordable Housing More Effectively. While additional
resources are clearly needed to address the crisis, more hotising could be buUt by
using existing resources more efficiently. Steps that could be taken include targeting
redevelopment funds to worst case needs and ensuring the.housing set-asides are
spent on a timely basis; increasing coordination and'colMboration between the state's
multiple housing programs; enforcing local"feir share" requirements to ensure that
local communities meet the demmid for housing at all income levels; and reforming s
the structure oflocal government finance to miriimize the fiscal disincentives to
residential development.
■ Increase State Supportfor Housing. California's affordable housing crisis will only
be addressed through an increased commitment,ofpublic resources. The state's strong
fiscal condition offers the opportimity to make major investments that will benefit
California's families and communities in the decades to come. Potential sources of
state support include: increased,support through the annual budget; usirig one time
moneys to endow the state's housing trust fund; and placing an affordable housing
bond measure before state voters.
Locked Out: California's Affordable Housing Crisis. California Budget Project May 2000
12
Santa Clara County
San Jose ranks fifth as one ofthe nation's most expensive housing markets and second as
the least affordable metropolitan statistical area in the us.
Only 16% ofhouses in Silicon Valley are affordable for households earning the median
income, down from 31% in 1999. This contrasts with the national average of60%.^'
In 1999, only 37% ofSilicon Valley houses were affordable for households with a
median income, down from 38% in 1998. This number contrasts with the national
average of68%.^°
By the year 2004, Santa Clara County will Avitness the creation of32,000 new jobs in the
traditionally low-wage food service and building maintenance industries and the retail
sector.^^
Last year, the Santa Clara County vacancy rate fell to a three year low of1.1%, while
apartment rental costs have soared by 61 % oVer the last three years.^^ Rents have jumped
more than 60 percent in the past five years in Santa Clara and San Mateo counties and
more than 50 percent in Alameda County.^^ Though high-income residents are able to
"compete" for rental housing, moderate and low-income families are not.
Today, nearly 90,000 Santa Clara Coimty residents pay more than 30% oftheir incomes
in rent. 43,000 residents pay more than halftheir income in rent.^^
From 1997-2000, median home prices in Santa Clara County skyrocketed from $311,146
to $ 513,950: an increase of65%.^®
Santa Clara County has the fifth highest percentage in California ofhousing likely to
contain significant amounts oflead, at 60,621 units. An estimated 10 percent ofhousing
in Santa Clara County is "substandard": a category that includes units built before 1940
and structures with inadequate plumbing, heating, or sewage disposal.^^
Faced with an average monthly rent of$1,760 for a one-bedroom apartment in the
county, a beginning teacher earning $40,500 would have to devote 73% ofher take-hone
38
pay to rent.
Further Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
,Dept. ofEconomics, California State University, Fullerton April 2001
Joint Venture's 2001 Index ofSilicon Valley
Joint Venture's 2000 Index of Silicon Valley
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partner^ips USA Jime 2001
Silicon Valley Projections 2000, Silicon Valley Manufacturing Group
Everyone's Valley, Working Partnerships USA June 2001
.
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
"Ibid.
Everyone's Valley, Working Partnerships USA Jime 2001
13
In San Jose, a minimum wage worker would have to work 175 hours per week to afford a
2-bedroom apartment.^®
^
'
Excerpts from Santa Clara County Collaborative on Affordable Housing and Homeless
Issues' Five Year Plan:
The severe deficit ofaffordable housing is the major reason that annually there
are 20,000 episodes ofhomelessness in Santa Clara Coimty. This problem has its
roots in the County has its roots in the huge housing/jobs imbalance where for
eveiy four jobs created in San Jose, only 1 new housing unit is built. The
Association ofBay Area Governments 1995-2020 Forecast Period shows a
coimtywide deficit between housing unit supply and projected household growth
of35,180 units.
This situation is exacerbated be the gap m income between those who are most
well offin the County and those who are just scraping by. Even^some make
just over minimum wage, others in the County are extremely prosperous, giving
Santa Clara Coimty a median monthly family income of$7,636, nearly $3,000
more than the median for California. This combination ofprosperity limited to
select sectors ofthe pppuktion coupled with the continually growing imbalance
between housing supply and demand has created a housing market in which many
are simply not able to compete. The feir market monthly rents for the year 2001
in the County is expected to be $928 for a studio, $1,058 for a one bedroom unit,
$1,308 for a two bedroom unit, and $1,792 for a three bedroommnit. The median
house price in San Jose is $485,000 and for a condominium it's $295,000.
A person in Santa Clara county needs to earn $20.35 an hour to rent a one
bedroom apartment at fair market rent; yet the incomes ofthe bottom third of
Silicon Valley workers is only $10.54,11% less than in 1989.
What do experts predict about the housing market?
'Tt feels to me like the market has crested." Brad Ininan, CEO,HomeGain quoted in San
Francisco Magazine, November 2000
"As long as salaries go up and some home buyers can pay cash for homes, prices Avill go
up"Ira Serkes, coauthor ofHow to Buy a House in Califomia. quoted in San Francisco
hfegazine, November 2000
"Once jobs begin leaving, home prices will moderate." Leslie Appleton-Young, Chief
Economist, California Association ofRealtors, quoted in San Francisco magazine,
November 2000
'Turther Concerns Regarding the Low-Income Housing Crisis in California" by Radha Bhattacharya,
Dept. ofEconomics, California State University, FuUerton April 2001
14
The average price ofa home in Santa Clara County is now an astounding $560,550. The annual
base salary ofa police officer in San Jose is $51,272;the base income ofa firefighter in the same
region is $32,000. A few mathematical calculations add up to the unhappy conclusion that public
safety officers simply cannot afford to live in the communities they serve. Although Santa Clara
County encompasses one of California's most extreme examples oftoday's record housing prices,
the salaries ofpolice officers and firefighters throughout the state are inadequate to buy homes in
higher-priced urban areas.^^"
The median price ofhomes sold in Santa Clara and San Mateo counties dropped slightly in May,
the first time in several years that the prices fell compared with the previous year. The number of
homes sold continued a six-month decline-down 16 percent in Santa Clara County and 14 percent
in the Bay Area as a whole.
The median price ofan existing single-family home sold in Santa Clara Coimty fell to $473,000 in
May, down 0.2 percent compared with May 2000, according to Data Quick Information Systems.
It's the first time since June 1994 that the county's median price has fallen compared with the
same month in the previous year. Last month's median price also is a decline of5.4 percent fi-om
ApriL''^
Strategies
Inclusionary zoning in the Mid-Coyote Valley and other infill areas would create coordinated
programs, imposing obligations on both the public sector and developers,to create housing that's
affordable for femilies and profitable to business. Approximately 8,600 units of additional
housing, including thousands ofunits for extremely low and very low-income femilies, could be
developed at a cost of$1.2 billion.^'^
A housing "superfimd" can be created to finance new affordable developments. This "superfimd"
would be coirq)osed ofrevenue generated through a temporary increase in the sales tax or the
issuance of general obligation bonds. When combined with other available fimds, commitments
fi:om developers, and capital generated by a marginal increase in the percentage ofredevelopment
agency fimds allocated to housing, the "superfimd" could underwrite the cost ofthe entire
inclusionary zoning program
Strengthening the rights ofarea renters is essential to protect the existing supply of affordable
housing firom gradually being transformed to costlier units. This could be achieved by improving
Silicon Valley's current rent control measures, enacting rent control in communities lacking
protections, and establishing safeguards against unjust evictions.^'^
"Housing for Public Safety" by Assemblywoman Rebecca Cohn, Controller's Quarterly Spring 2001
San Jose Mercury News,Jime 26,2001
San Jose Mercury News, June 26,2001
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
Everyone's Valley, Working Partnerships USA June 2001
SANTA CLARA COUNTY HOUSING TASK FORCE:
AFFORDABLE HOUSING:
SUPPLEMENTAL MATERIALS
4 PROPOSED SOLUTIONS TO LOW INCOME HOUSING
AFFORDABILrrY
Xhe worsening ofthe affordable housing short^e in the case oflow-income households
directly stems from 2 reasons: a drop in the number of unsubsidized low-cost rental housing
units in the private market and a growing number oflow-income renter households. The
latter occurred because disproportionately more jobs that were created in certain areas in
California were low-income jobs. The &st part ofthis chapter(Section 4.1)presents Steps
that State policy makers can take to insure that the solution to middle-income hosing
affbrdability does not make low-income affordability worse. The second part ofthis chapter
(Section 4.2)presents the case study ofthe Housing Trust ofSanta Clara County(HTSCC).
4.1 Steps That State Policy Makers and Housing Personnel Can Take
Density: Raising the development capacity ofexisting sites increases the overall
potential supply of housing by malnng more intensive use ofavailable land. Higher
densities <*aTi improve the affordability ofhousing because per umt land,costs are lower and
construction can be performed more efficiently. Density increases near employment centers
and transit nodes can also help to alleviate automobile congestion. Many counties have
incorporated these"Smart Growth" policies in their consolidated plans. Communities can
adopt zoning and/or subdivision regulations to allow a "density bonus" above that which is
normally permitted on the site in exchange for the provision ofsome below market rate
housing units. Local authorities could enhance compatibility between the new higher
density development and existing development and focus public debate on the actual
appearance and effect of new housing rather than arbitrary density numbers.
44
Inclusionary Zoning: Inclusionary zoning stipulates a minimum percentage oflow
and moderate-income housing in new developments.Inclusionary programs are based on
mandatory requirements or on development incentives, such as density bonuses. The
establishment ofinclusionary zoning does not depend on State or Federal subsidies or the
direct involvement of outside agencies.It is a local requirement under local control. If a
jurisdiction is attempting to alleviate the acute housing shortage for low- to moderate-
income households through zoning, inclusionary zoning is a good choice.
Office/Housing Linkage Programs: Some communities with a housing crisis have
found it necessary to require new industrial, commercial, and office development to aid in
the development ofhousing.In a linkage program, project approval is conditional with the
applicant either directly providing market rate and/or afifordable housing, or paying m-lieu
fees for housing purposes. Linkage programs can be mandatory in which all new non-
residential development must devote, or pay in-lieu fees, a percentage oftheir development
to affordable housing. Cities experiencing large-scale employment growth can use linkage
programs to mitigate the impact ofnew jobs on the local housing market or community as a
whole. Some housing authorities doubt the merits ofthis approach;they favor the "carrot"
approach rather than a "stick" approach.'"
Rezoning Vacant Landfor Residential Use: Many areas in Southern California and
the Bay Area have a shortage ofland designated for residential use and a surplus ofland set
aside for commercial, office, and industrial use. Politically, changing the general plan and
rezoning surplus industrial and/or commercial land can be an effective way to make a
significant amount ofland available for housing. In addition, underutilized agricultural land
and surplus land owned by public entities can be rezoned for residential use. Many
45
communities own land: unused school sites, surplus public properties, and even the air rights
ofparking lots. All have the potential to house a new residential development.
Mixed Use: In contrast to conventional single use developnient, mixed use
development ofa tract ofland or structure combines residential uses with one or more other
uses such as office, retail, public, entertainment, or even manufacturing. Mbdng uses often
requires changes to the zoning ordinance or planned umt development regulations. To
encourage housing, a commumty can allow residential uses in commercial areas and other
non-residential zones,especially downtowns,thereby creating multi-use areas.
Infill: Ttifill development occurs on sites that have been bypassed by previous
development Utilities and other inffastructure typically already serve infill sites; this can
reduce the ffont-end costs of development. These sites are often well suited to multiple
family projects, as more units offset higher land costs and make housing more affordable
Landbanking: The development of affordable housing depends,to a large degree on
the availability ofa site. Landbanking is a technique whereby a city or county,in
anticipation offuture development,acquires vacant land or underutilized sites at a lower
cost or before it comes on the market State law gives local governments, and non-profits,
priority in the purchase of surplus land. When resold or leased to a developer,restrictions for
the development ofaffordable housing can apply.
Growth Control Exemptions: Many jurisdictions have enacted ordinances to control
their growth. They may do this by limiting the number ofbuilding permits that can be issued
each year, limiting growth in specific areas or corridors and encouragmg it in others, or
restricting major development until certain infrastructure performance standards are being
achieved. Although removing these growth limits may be the most effective way to improve
46
overall affordability,the growth control criteria by which projects are permitted can be
designed in such a way as to encourage certain types of affordable housing.
Adaptive Reuse: The conversion ofoutmoded buildings such as old school buildings,
train stations, warehouses,factories, and other industrial buildings, can provide the
opportunity for new residential uses within a community. ^^
Self-Help Housing: Self-help, or sweat equity, housing enables potential
homeowners to build up credit for a down payment on a home by contributing their labor to
the construction or renovation. California Housing Finance Agency(CHFA)finances self-
help housing by providing below market bond financing for mor^ages on homes in urban
areas. The Farmers Home Administration Mutual Self-Help Housing program has sponsored
many rural projects.
Factory-Built Housing: Factory-built houses are the least ejcpensive to construct.
Once built, these prefabricated houses blend with custom housing. Manufactured housing
are factory built mobile homes built to the HUD mobile home standards.
Mobile Home Park Preservation: The preservation of mobile home parks allows a
community to protect a valuable source of usually irreplaceable affordable housing.
Senior Housing: Typical techniques to meet the housing needs ofthe elderly include:
smaller attached or detached housing for independent living (both market rate and
affordable); second units; homesharing for those who wish to stay in their homes; age-
restricted, below market rate rental projects; congregate care facilities; lifecare facilities
(similar to congregate care, but where occupants own their own condominium or
cooperative unit); residential care homes licensed by the State; and skilled nursing homes.
47
Single Room Occupancy Hotel: Formerly homeless people often find SROs an
affordable entry point into the housing market. The availability oflow-cost SROs can also
protect some people ftom becoming homeless.
Streamlining Procedures: Recogni2ang that administrative delay adds to
development costs,jurisdictions have reviewed and streamlined their land use and
development procedures. The intent is to simplify and coordinate the means of obtaining
rezonings,use permits, subdivisions, approval of design and engineering plans, and building
permits.
PATFf; The energy costs of housing are among the most controllable factors
affecting housing affordability. High utility or energy costs could be the final factor that
forces a family into homelessness. (Especially considering the current"energy crisis that
California faces.) The Partnership for Advancing Technology in Housing(PATH),reduces
the cost ofbuilding and operating homes by helping to speed the adoption ofnew
technologies in building as well as in saving energy. PATH homes lead to a 20%
reduction in the purchase price of a home.
Effective Use ofLocal Resourcesfor Affordable Housing: Private sources of
financing and funding are available, and growing. Foundations, banks, savings & loans, and
private investors have become much more active in assisting in the development of
affordable housing. California voters have passed several bond measures to fund
rehabilitation and construction ofa significant amount ofaffordable housing.
Municipal bonds put the power ofpublic finance to work for affordable housing. Because
the holders of municipal bonds pay no taxes on the interest they receive, Ipcal bonds have
48
lower interest rates than conventional financing. Local governments can also apply other '
financing tools to assist in residential development
State Funding has been given a boost by the passage oftwo bond measures to make
available $450 million statewide for new construction and rehabilitation of affordable
housing. Private Resources are available fi:om banks,and savings and loans as well as
private investors. Commitments to the community.Federal regulations, and the tax code
have helped create several financing and subsidy sources for the development of affordable
housing.
Package and Advertise Information on HomeBuyer Assistance and Low Cost
Rentals: Lack ofknowledge ofall programs and resources is a final barrier to home
ownership. Housing Authorities should have homeownership feirs, seminars and trainings
have greatly assisted would be purchasers in sifting through the glut ofdata and claims made
by lenders.^^
Expand City-County Partnerships: Many cities have established redevelopment
areas. Under State law,20% ofgross redevelopment revenues must be set aside into a low-
income housing fund(LIHF)and be spent on eligible housing activities. Many cities have
substantial fimds that have not yet been allocated or encumbered. If counties enter into
partnerships with such cities to encourage rehabilitation, new construction or
homeownership within an incorporated city,the county should expect to leverage that city's
resources in the following ways.
■ Coimties should undertake efforts to identify all surplus county-owned property with the
intention ofselliug or leasing the land for affordable housing projects, where appropriate
and feasible.
49
■ Encourage development of affordable housing on parcels located in the unincorporated •
areas ofthe county 'vsdiere land may be cheaper.
* Donate, selling or leasing land at a significant discount v^en the land is being used for
development of affordable housing
The
Affordable Housing Strategy, 1999, mentions several gmding principles
for Orange County. Many ofthese principles have a general appeal that could be used as
general guidelines
* Given limited resources, do not compete with the private sector.
■ Coordinate county efforts in support of city efforts.
■
Stimulate activities that would otherwise not occur.
■ Help those who are attempting to help themselves
» Help with a hand-up,not with a handout
■ Tackle problems affecting communities, notjust individuals.
■ Focus on lending, not granting.
■ Focus on leveraging other resources, not duplicating them.
■ Focus on roles that ntiliVg the strengths of other institutions such as lenders' expertise.
■ Focus on efficiency, for example,use Section 8 operating reserves more efficiently.
■ Reducing program administration costs by linkmg programs and desiguating one lead
agency.
■ Keep approaches as simple as possible and fill iu gaps.
■ Maximize the efficiency ofhousing authority by having outside firms handle routine
tasks such as origination, servicing, monitoring, and on-going marketing.
50
■ Reverse neighborhood decline in targeted unincorporated islands in a coordinated effort
to encourage their annexation.
» Provide 3 options for loan subsidy approaches to owners who are willing to maintain
their rents at affordable levels for 10 years. This will reverse nei^borhood decline.
Option 1: Offer interest write-down grants through existing financial institutions
for qualifying rental properties, and market the program jointly with participating
lenders. HUD has studied rental programs around the country, and found that
this strategy can lead to a high level ofefficiency and leverage. The loan would
be due in full, possibly with a penally or higher interest rate, if rents rise above
affordable levels. Market the low interest loansjointly with lenders.
Option 2; The County provides direct second loans to qualifying apartment
builders. The second loan would be on a residual receipts basis and forgivable, a
tenth at a time,over ten years. Rents would be capped at affordable levels for
these 10 years. The county would monitor performance in al these cases.
Option 5; Set up a loss reserve program. The housing authority would deposit a
sum with lenders to be held as a reserve for losses on a second mortgage.
Lenders would make loans for needed rehabilitation to qualifying apartment
owners. Rents woiild be limited for 10 years at affordable levels with penalties
for non-compliance HOME and redevelopment funds can be used for rental
rehabilitation efforts.
4.2 Case Study—^Housing Trust of Santa Clara County
Santa Clara County-the heart ofthe booming Silicon Valley-faces a severe crisis
ofaffordable housing. In Silicon Valley, you are at the poverfy level if you are making
51
1 ft
providing skills, services and opportunities for families to move up and out of poverty.
Wheeler Creek embraces the best in Smart Growth policies: infill development, attacking
blight, creating open space and encouraging economic development
5 SPECIFIC POLICY SUGGESTIONS
Considering that in many areas ofthe state there is a crisis in middle-income housing
affordability,the following policy suggestions have been proposed to assist in developing
greater low-income housing assistance:
■
Correct counter productive regulations. The State's housing element approval process
has imposed unanticipated constraints on the ability oflocal governments to jointly
respond to affordable housing opportunities. The State Housing and Community
Development Department(HCD)is required by law to review each jurisdiction's
Housing Element and find it either in or out ofcompliance with State law. State law
requires that each individual community provide the full array of affordable housing
development resources(developable land, financing, voter approval,etc.) Given the
drive toward regional planning for regional housing needs,it has been a counter
productive policy.
"
■ Correct the number ofbarriers to low-income housing development that are present in
Article 34 ofthe California Constitution. Article 34 requires local voter approval oflowincome housing developments when units are to be publicly owned,or privately owned
but financed 1^ public agencies, and more than 49% ofthe units are reserved for lowincome occupancy. New legislation should require jurisdictions to ensure compatibility
ofnew construction with the character and scale ofthe surrounding neighborhood. With
57
this in place, legislation could seek to amend Article 34 so to make it more favorable to
development ofaffordable housing.^^
■ Revise State guidelines to permit a comprehensive approach to meeting the housing
needs ofagriculture workers. State guidelines for agricultural worker housing have
restricted the ability oflocaljurisdictions to use available funding. The agricultural
worker population is general engaged in work on a permanent year round basis, as
opposed to primarily seasonal or migratory. State funds for ^riculture worker housing
are devoted solely to the needs ofmigratory workers.
■ Remove the inconsistencies in CDBG. Such things as five-year plans vs. one year
allocations.
■ Remove CDBG restrains thatprohibit the involvement offor-profit housing developers.
■ Try to change the Davis-Bacon prevailing wage requirements that are incompatible with
requirements regarding the use ofcommunity based contractors.
■ Remove inconsistencies between State and Federal laws that restrict development oflow
to moderate-income housing in California. For example,in rehabilitation program
standards. NEPA(Federal)requires referral ofall construction projects to the state
office ofhistoric preservatiotL State Law(CEQA)only requires such referral when the
property or any existing structure appears on local, state or Federal historic registers.
The extra time(minimum of30 days)and the amount ofunnecessary paper work
involved in referring properties with no historical value to the state ofGce of historic
preservation, creates uimecessary delays in projects and increases overall cost, thus
decreases the aflfordabiUty ofthe units being considered.
58
■ Recognize that Federalprocurement standards conflict with some California County
standards and add to the cost ofnew housing units.
■ Seek assurancefrom HUD about the continuity ofSection 8. This would allow landlords
to be assured that their developments receive a stea(fy flow Ofincome.
■ Increase the percentage ofSection 8 certificate allotment that could be converted to
project-based Section 8. (Currently it is upto 15% ). County supported developments
could use project based section 8 subsidy in a project based to build more affordable
housing units.
■ Do not cap the length ofthe Section 8 subsidy in the short term. ITiis limits the ability to
use it creatively as leverage.
■
Waive,the collection ofimpactfees or developmentfees. In a recent study conducted by
the Public Policy Institute of California, the researchers foimd that fees imposed on new
construction are significant, typically falling in the range of$20,000 to $30,000 per
dwelling.^ Traditionally, cities and counties have used property taxes to finance
mfiastructure—such as roads,schools, and parks—^for residential development.In turn,
new residents, through their property taxes, would help finance inffastructure for others
in the future. Proposition 13,enacted in 1978, limits the increase in property tax that
homeowners pay. The financing ofiifiastructure for new homes in California is no
longer shared by aU property owners in a community,but is bome instead,in different
degrees, by developers and new home bikers. Ifstate funds are not used,local
governments have only two alternatives: bonds or exactions^ Exactions are payments
made by a developer to local governments for the right to proceed with a project.
Exactions can include development fees, the dedication of public land,the construction
59
or maintenance of public infrastructure, or the provision of public services. Lnpact fees,
raise the cost of building a home. Developers then tend to focus on building expensive
homes in order to be able to recoup the development fees.^^ During times of economic
boom,such as now, counties are flush with property tax revenue that results from resale
of property. Counties can allocate this revenue for infrastructure development so that
the use of development fees can be minimized.
Providefinancingfor the construction ofnew schools
Until the mid-1980s,only
cities and counties could impose development fees,including school fees.In 1986,the
legislature authorized school districts to impose their own fees on new construction.
Although school fees were capped,based on the square footage ofthe new development,
subsequent court decisions have ruled that the fee limits apply only to fees levied by
school districts and not to those imposed by cities and counties. This leads to the
possibility that some communities will increase their use of development fees, which in
many cases are already substantial. Cities and coimties will continue to rely on
development fees and exactions unless some other source offunding is provided,
especially for the construction ofschools. Financing mechanisms that could be
harnessed to distribute the burden across the public include state general fund subsidies,
as well as state and local general obligation bonds.
Try to reduce the widening gap between rich andpoor in California. According to a
recent study conducted by Public Policy Institute of California, the widening gap
between the rich and poor in California results from not only from rising income among
those in the higher income levels, but also from a substantial decline in income among
those in the mid to lowest levels ofincome distribution.^^ In 1969, a native male with a
60
Bachelor's degree earned 48% more than that earned by a worker without a bachelor's'
degree. In 1997,the retum to a Bachelor's degree was to 69%^gher. Figure 8 below
shows that the retums to experience have also grown over the past 30 years. In 1969,a
native worker with 25 years of experience earned 68% more than native worker with 5
years of experience, and by 1997 he was earning 91% more.
Figure 8
Returns to Education and Experience for Native Males,1969 and 1997
0.8-
0.6
0.4-
0.4S
0.37
0.2
0.09
1
tOghSchoeiv.
2
BtcMoc'sv. .
llthGrede
IH1S69 ■11997]
Source: Public Policy Institute of California, Research Brief.
The study notes that a major reason for the increase in income inequahly is the
change in the retums to education. The latter results from more from falling wages for men
at the bottom of the distribution than for increases for men at the top. The more recent
phenomenon of the boom in the hi-tech sector and shortage of computer programmers have
caused wages of skilled workers to increase phenomenally and further widen this gap.
One major factor in California, in contrast to the rest of the nation, responsible for
the rising jnepme inequality is that the proportion of immigrants in the State's workforce has
grown considerably and this has been concentrated at the bottom and lower-middle of the
income distribution.
61
Income inequality can be attributed to the sharp faU in the wages of workers(Reed,
et. al) with a high school diploma and less. Public policy should increase public awareness
ofthe importance of a good K-12 education followed by entry into college. There is also a
need to enhance computer related skills in today's hi-tech world. This can be done at
community colleges and IT centers.
Betts notes that California does not have a geographically homogeneous market.
Among the areas with the largest spread in earnings between workers with a high school
diploma and workers with other education levels were the Los Angeles, Orange County,and
the Central Valley Regions.
An important policy concem is the low educational attainment ofimmigrants living
in California. The study done by Betts at the Public Policy Institute of California notes that
about three fourths ofimmigrants in California have permanently ended their schooling
before entering the US. Legislation should focus on offering training programs that can
help adult immigrants who have not graduated form high school.
■ Enact legislation tofavor the retention ofskilled workers in California. It is important
that California continue to attract skilled workers. About half ofthe State's college
educated workers come j&om other states and counties(Betts,2000). The State needs
to undertake policies to ensure that California can continue to attract students and skill
from elsewhere. Some ofthe State's universities face high costs of housing. A recent
article in.the Orange County Re^ster on November 25,2000 noted that Stanford
officials worry that ifthe campus cannot expand some ofthe universities 14,000 students
and 1,640 faculty will be priced out ofthe area. The current housing crunch in the
Silicon Valley area is adding pressure on them to expand into the hillside. The
62
university wants to build more than 3,000 additional low cost housing units on campus'
in the next decades to ease the strain on students and staff. They are at a competitive
disadvantage with their peer schools because people cannot afford the rents in Palo Alto.
A Santa Clara Coimly supervisor wants them to remain undeveloped for the next 99
(
years. Environmentalists are demanding permanent protection of1,000 acres of green
land,home to the threatened tiger salamander. This issue is currently under
consideration by Santa Clara County.
Reduce litigation and regulations that especially affect the construction ofmulti-family
housing.
Encourage theformation ofhousing trustfunds similar to what exists in Silicon Valley.
Housing TrustFunds can act as catalysts and promote comprehensive regional solutions
in a coordinated framework.
Work to increase the Federal government's commitment to housing assistance. A recent
report. Raising the Roof, extrapolates fiiture affordable housing needs. According to this
report,,the number oflow-income households needing some form ofhousing assistance
could increase by 1.3 million by 2020 if,the number ofCalifornia households grows to
16.2 million by 2020, and ifthe current percentage of households who are both lowincome and are over-paying for housing remains constant Ifthere is no corresponding
increase in housing assistance levels,total unmet affordable housing needs in the State
will rise to about 3.7 million units in 2020. The report notes that affordable housing
needs track with rents. So,a slowdown in rental housing production will cause rents
and therefore affordable housing needs to rise. In light ofthese findings and the findings
ofthe California's Budget Project, it appears that a renewed Federal commitment to
\
63
affordable housing including additional financial support is essential to solving
California's housing crisis.
■
Generate increased State supportfor housing affordability. California's affordable
housing crisis cannot be addressed without an increased commitment ofpublic resomces
firom the State. Potential sources of State support include: continued support through the
annual budget; using one time moneys to endow the State's housing trust fund and other
housing trust funds in crisis areas; and placing an affordable housing bond measure
before State voters.
Conclusion
Since public funding either at the Federal level or at the State level is generally
scarce and has several competing uses, policy measures should first focus on the other
solutions that are outlined above and are geared towards:
■ easii® regulation,
■ providing more opportunity for localjurisdictions to act in a coordinated maimer,
■
allowing jurisdictions to leverage scarce financial resources more effectively,
■ removing distortions in California tax policies that encourage commercial use as
opposed to residential use, and
■ diminishing the wage gap between skilled and unskilled workers.
Given the scarcity ofdevelopable land in key metropolitan areas, and the general scarcity of
funds for affordable housing, the measures discussed in the report can help alleviate the lowincome housing crisis, without having to divert resources fix>m middle-income affordability.
64
GOAL 8: LIVABLE COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and services
are located together, and are all linked by transit and other alternatives to driving alone.
37% of New Housing, 32% of New Jobs Are Located Near Transit'
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
stations and major bus corridors reinforces the creation of
compact, walkable communities linked by transit. This helps
to reduce traffic congestion on Silicon Valley freeways.
50% ■
HOW ARE WE DOING?
A survey of 25 Silicon Valley cities found that 37% of all new
housing units approved in 2000 were located within one-quarter
mile of a rail station or major bus corridor. Thirty-two percent of
new commercial/industrial developments were also located within
one-quarter mile of transit, representing 15,700 potential new jobs.
40%
30% •
Approvals near transit declined from the previous year when
57% of new housing units and 35% of new jobs were located
near transit.
1998
1999
I PERCENT OF HOUSING UNITS
2000
I PERCENT OF JOBS
NEAR TRANSIT
NEAR TRANSIT
Source: Valley Transportation Authority, Congestion Management Program;
City Planning Departments
vv
LIVABLE
V
ENVIRONMENT
m
GOAL 9: HOUSING CHOICES We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth iii jobs and growth in housing.
Approvals for New Housing Fall by 50%; 1,600 New "Affordable" Units Approved
WHY IS THIS IMPORTANT?
TOTAL NEW HOUSING UNITS APPROVED, INCLUDING
NEW AFFORDABLE HOUSING UNITS, SILICON VALLEY
Our economy and community life depend on a broad range of
jobs. Building housing that is affordable to lower- and moderateincome households provides access to opportunity and maintains
14,000 ■
balance in our communities. This indicator measures housing units
approved for development by Silicon Valley cities in each fiscal
12,000
year, this is a more "upstream" measure than actual housing starts.
10,000 •
HOW ARE WE DOING?
8,000 ■
The number of new housing units approved for development by
Silicon Valley cities fell by more than 50%,from 12,060 in fiscal
year 1999 to 5,370 in fiscal year 2000.
Despite this overall decrease, the number of new affordable
housing units approved remained around 1,600. This number
represents 31% of total net new housing units approved.
Affordable rental housing is for households making up to 60%
of the median income. These units are primarily developed by
nonprofit housing developers or units set aside as "affordable"
in market-rate developments.
6,000 ■
4,000 ■
2,000 ■
1998
1999
I NEW HOUSING U.NITS
Source: City Planning Departments
2000
I AFFORDABLE UNITS
Only 16% of Houses Are Affordable to Median-Income Households;
Rents at Turnover Rise 26% in 2000
WHY IS THIS IMPORTANT?
The affordability, variety and location of housing affect a region's
ability to maintain a viable economy and high quality of life. Lack
of affordable housing in a region encourages longer commutes,
which diminish productivity, curtail family time and increase traffic
congestion. Lack of affordable housing also restricts the ability of
PERCENT OF HOUSES AFFORDABLE TO MEDIAN-INCOME HOUSEHOLDS
70%
60%
50%
service workers — such as teachers, registered nurses and police
officers — to live in the communities in which they work.
HOW ARE WE DOING?
In 2000, 16% of Santa Clara County houses were affordable for
households with the median income, a significant decrease from
31% in 1999. This number contrasts with the national average of
60%. Despite rising home prices, Silicon Valley's hoirie ownership
rate of about 60% mirrors the national average for metropolitan
areas. Between 1987 and 1999, home ownership rates have ranged
from a low of55% in 1987 to a high of64% in 1998.
In 2000, average apartment rental rates at turnover increased by 26%
in real dollars compared to a 2% increase in median income. The
average monthly rent was $1,687 for all types of units. Occupancy
rates are at 98.7%, up from 97% in 1999.
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
I SANTA CLARA COUNTY
Source: NAHB, Department of Housing and Urban Development
INCREASE IN APARTMENT RENTS AT TURNOVER COMPARED
TO INCREASE IN MEDIAN HOUSEHOLD INCOME
1.75
1.50
1.25
1.00
To live in aii average one-bedroom apartment in Silicon Valley,
a preschool teacher would have to set aside 80% of his or her
monthly salary for rent payments. Rent would take up 30% to
38% of monthly pay for public school teachers, police officers
and'nurses earning average salaries.
.50
.25
1991
1992
1993
1994
1995
■■1 AVERAGE RENT
1996
1997
1998
1999
2000
■■ MEDIAN INCOME
Source: NAHB. RealFacts, HUD
PERCENT OF MONTHLY INCOME TO PAY MEDIAN RENT
Pr^chool
Teacher
±=l=t
Public School
Registered Nurse
Police Officer
Teacher
Source: RealFacts. Center for Child Care Workforce, California Nurse's Association, California
Teacher's Association, Silicon Valley Police and Sheriff Departments '
REGIONAL
TREND
INDICATORS
Slight Increase in Engineering Graduates from Local Universities
WHY IS THIS IMPORTANT?
ENGINEERING DEGREES AWARDED BY
Access to talent is a top factor influencing business location deci
sions (see Joint Venture's Internet Cluster Analysis^ 1999.) This
indicator shows the potential local pool of engineering talent for
technology-based industries,
UNIVERSITIES SERVING SILICON VALLEY
4.500
4,000
3.500
HOW ARE WE DOING?
3,000
The total number of engineering degrees awarded from local
universities increased slightly in 1998,from 3,807 to 3,998, Driving
2,500
this increase was a jump in Masters degrees awarded from 1,621
to 1,935, nearly matching the 1994 high.
2,000
1,500
The total number of engineering degrees awarded annually from
local universities has decreased 8% from the 1994 high, compared
to a 3% decline nationally during the same period.
LOOO
500
1991
1992
1993
1994
■■ bachelor's
1995
1996
1997
1998
■ DOCTORATES
mm ma!
In 1998, the greatest numbers of degrees were awarded in
computer engineering and electrical engineering, 977 and 881
respectively.
The greatest shift at local schools has been away from electrical
engineering degrees (which have declined 21% since 1987) to
computer engineering degrees (which have grown 81% since
1987). Asian American students earn 48% of all BS engineering,
degrees awarded by Silicon Valley engineering programs. Whites
earn 37% and Hispanics 6%,
Source: American Association of Engineering Societies
Housing Affordability Declines Slightly; Rental Rates Rise Slowly
WHY IS THIS IMPORTANT?
PERCENTAGE OF HOUSES AFFORDABLE FOR
MEDIAN-INCOME.HOUSEHOLDS
y
The affordability, variety and location of housing affect a region's
ability to maintaiii a viable economy and high quality of life. Lack
of affordable housing in a region encourages longer commutes,
which diminish productivity, curtail family time and increase
traffic congestion. Lack of affordable rental housing can cause
unsafe occupancy levels and household stress,
70%
60%
50%
40%
30%
20%
HOW ARE WE DOING?
10%
In 1999, 37,6% of Santa Clara County houses were affordable for
0%
1991
1992
1993
1994
1995
1998
1996
^m SANTA CLARA COUNTY
1999
■
INCREASE IN APARTMENT RENTAL RATES COMPARED TO INCREASE
IN MEDIAN HOUSEHOLD INCOME, SANTA CLARA COUNTY
160
140
The decline is due to slightly higher interest rates, a slowdown
in median income growth and an increase in the median home
price of 14% in 1999 to $346,000,
In 1999, average apanment rental rates increased by 4% compared
120
to a 7%.increase in median income. The average monthly rent
100
was $1,357, Occupancy rates are at 97%, up from 96% in 1998,
1991
1992
1993
1994
AVERAGE RENT
I
1995
1996
1997
1998
1999*
I MEDIAN HOUSEHOLD INCOME
Sources: National Association of Home Builders, Realfacis, Department of Housing and Urban Development
^Estimate
households with a median income, down from 38,3% in 1998.
This number contrasts with the national average of 68,3%-
INNOVATIVE
ECONOMY
GOAL 3: BROADENED PROSPERITY Our econoniic growth results in a higher standard of living for lower-income people.
Income of Poorest Households Increases Slightly, but Remains Below 1992 Level
WHY IS THIS IMPORTANT?
HOUSEHOLD INCOMES OF SANTA CLARA COUNTY RESIDENTS,
ADJUSTED TO REPRESENT A HOUSEHOLD OF FOUR, 1998 DOLLARS
This progress measure looks at change in household income at
the top 20% and bottom 20% of the income distribution. House
hold income includes income from wages, investments. Social
Security and welfare payments for all people in the household.
$140,000 $120,000 -
Though the data presented are the best available at the regional
level, data are derived from an annual sample of as few as 200
$100,000 -
households. Thus, these data are more useful for tracking longterm trends rather than specific year-to-year movements.
$80,000 -
The indicator compares income available to a representative
household at identical points in the distribution over different
periods of time (the 80th percentile, the 20th percentile). In
fact, over time, specific households and individuals move up and
down the distribution. Data on this "mobility" is in the process
of being developed at the regional level.
$60,000 $40,000 ■
$20,000 ■
$0 ■
1992
1994
1996
1998
HOW ARE WE DOING?
1 80TH PERCENTILE
Source; Census Bureau
I 20TH PERCENTILE
After remaining at approximately $34,000 during the start of the
economic boom (1994—96), inflation-adjusted income of repre
sentative households at the lowest 20th percentile of the income
distribution has started to rise. Between 1996 and 1998, their
household income rose approximately 7.5%. However, the 1998
level of$36,700 remains below the income level earned by the
bottom 20% of households in the early 1990s.
The increase in the lowest 20th percentile follows a national
trend where tight labor markets are increasing average wages.
Between 1996 and 1998, inflation-adjusted income of representa
tive households at the 80th percentile increased 28.4%.
LIVABLE
ENVIRONMENT
®« livable COMMUNITIES We create vibrant communities where housing, employment, places of worship, parks and ser
vices are located together and are linked by transit and other alternatives to driving alone.
57% of New Housing, 35% of New Jobs Located Near Transit
NEW HOUSING UNITS AND NEW JOBS WITHIN 1/4 MILE OF RAIL
STATIONS AND MAJOR BUS CORRIDORS, SILICON VALLEY
WHY IS THIS IMPORTANT?
Focusing new economic and housing development near rail
stations and major bus corridors reinforces the creation of compact,
walkable communities linked by transit. This helps to reduce
traffic congestion on Silicon Valley freeways.
60% •
50% ■
HOW ARE WE DOING?
40% •
Silicon Valley cities are approving more residential and commercial/
30% ■
corridors.
industrial development near rail stations and along major bus
In 1999,57% of all new housing units approved by Valley cities
were on property within one-quarter mile of a rail station or major
bus corridor. Thirty-five percent of new commercial/industrial
Percent of New Housing Units
Near Transit
Percent of New Jobs
• Near Transit
developments were also located within one-quarter mile of transit,
representing nearly 18,500 potential new jobs. This compares
favorably to the previous year, when 29% of new housing units
and 26% of new jobs were located near transit
Sources; Center for Urban Analysis, Congestion Management Frograni/VTA,
City Planning Departments
GOAL 9: housing choices We place a high priority on developing well-designed housing options that are affordable to people
of all ages and income levels. We strive for balance between growth in jobs and growth in housing.
14% of New Housing Is Affordable to Lower-Income Households
NUMBER OF NEW AFFORDABLE HOUSING UNITS APPROVED COMPARED
TO TOTAL NEW HOUSING UNITS APPROVED, SILICON VALLEY
WHY IS THIS IMPORTANT?
Our economy and community life depend on a broad range of
jobs. Building housing affordable to lower- and moderate-income
households provides access to opportunity and maintains balance
14,000 -
in our communities.
12,000 HOW ARE WE DOING?
10,000 -
In 1999, Silicon Valley cities approved 1,700 new affordable
housing units. This number represents 14% of total net new
housing units approved (12,200).
. 8,000 6,000 -
Though more units in total were approved, the current year
performance represents a slight decline from 1998 when 15% of
the 10,600 units approved were affordable.
4,000 -
2,000 -
0-
1998
I NEW HOUSING UNITS
1999
I AFFORDABLE UNITS
Sources: Center for Urban Analysis, Congestion Management Program/VTA,
City Planning Departments
Affordable rental housing is available to households making up
to 60% of the median income. These are primarily units devel
oped by non-profit housing developers, or units set aside as
"affordable" in market-rate developments. There are currently
33,000 households on the Santa Clara County Housing Authority's
waiting list for affordable housing.
E V E R Y O N E'S
VALLEY
Affordable Housing:
Definitions & Terminology
Baseline:
Affordable Housing Needs in
Silicon Valley
To determine the need for affordable housing,
the population of a geographic area is often
divided into the following categories based on
8hortaqe ofAffordable Units
According to the:1990 Censusi, over 53,000
household income in relation to the median
:familiesT- full, one-fifth of San Jose house-
income fcr that region.
holds-are considered ELI or VLI, indicating
a major need for affordable housing.
• Moderate-income (M): 80-120%of the
V
• Low-income (LI): 50-80%of the median
• Very low-income (VLI) 30-50%of the median.
• Extremely low-income (ELI): 0-30%of the
Census data indicate the.following specific
shortfalls:
ELI
-16,538
VLI
- 9.411
In Silicon Valley" the median income for the
LI
+ 8,988
Vear 200n is S87 000 Applying the income
TOTAL
-16,961
categories to this median provides the
following ranges
■During;the:last:decade, growth in the gap
between housing costs and income has
dramatically increased. Therefore, the
shortage of ELIiand: VLI units in the 2000 census should: be substantially higher.
•M: S69.600-S104,400
•LI: S43.500 -S59.600
•VLI:326100-S43 500
•ELI:SO - $26100
In fact. The City of San Jose's: own precensus:caleulations:also;indicate that from ^
"Affordable" housing is commonly defined
as housing that costs no more than 30
:1999-2006j.the:need for affordable: units will:
percent of grcss housenold income
continuetorise^:
ELI and VLI units
5,113
2,345
Total additional 1999-2006 7,458
LI units
* 'Silicon Valley" is often synonymous with Santa Clara
County, in this case, however,the median income
figure refers to Santa Clara County and parts of San
San Jose's Total need, 1999-2006:
24,419 affordable units
Mateo, Santa Cruz, and Alameda Counties
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8
Creating;New Hbiislng:Option t
Inclusionary zoning ordinances often include a
variety of components,to assist developers in
indusionary Zoning
meeting its reqtiirements. Amunber ofthese are
listed below;
Density bonuses
Inclusionary zoning ensures that a portion ofthe
region's housing production is dedicated to cre
ating affordable units. Essentially, inclusionary
zoning ordinances,or below market rate(BMR)
programs,use municipal authority over land use
This practice allows builders to achieve den
sities higherthan normally accepted in a resi
dential zone. For example, the City of
Sunnyvale allows developers to apply for a
15 percent density "bonus" if they provide
units below market rate. One recently ap
to require developers to dedicate a percentage
proved project on Maiy Ave. in Sunnjrvale
of units for moderate-, low-, very low-, or ex
expanded from 28 to 32 units as a result ofa
tremely low-income families.
density bonus^". The sale or rental ofthese
"extra" units can help offset the cost to de
In practice, these measures set an "inclusionary
requirement" often ranging between 10 and 30
percentfor each development. Some ordinances
allow developers to pay an "in-lieu" fee into an
affordable housing fund as an alternative to ac
tually building below market rate units.
lowed to move through the city's planning
Cities can create mixed-income communities in
and review process at an accelerated rate,
thereby reducing the holding costs to the
a variety of settings by applying inclusionary
zoning to developments ofsingle family homes
and condominiums, as well as apartment com
velopers of marketing some units at belpw
market-rates'^
Fast track
Projects with below market rate units are al
developer. For example, Monterey County
offers an accelerated review process to
builders who set aside 25 percent of new
plexes. Although most ordinances require de
velopers to meet the inclusionary requirement
units as affordable^'.
only on projects greater than 10 or 20 units,some
restrict inclusionary zoning to larger projects of
Fee waivers
50 units or more. In order to capitalize on the
units, fees normally assigned to develop
ments may be reduced or waived entirely.
As an incentive to develop below marketrate
potential for affordable units in large projects,
cities may apply inclusionary zoning to units
built on large,so-called "in-fill" sites(vacant or
For example, although the City ofSan Jose
underutilized land in urbanized areas) and land
dinance,it does waive a number ofconstmc-
reserves!
tion fees,park fund dues and other taxes for
has not enacted an inclusionary zoning or
affordable housing projects.
New Housing
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Design flexibility
single and multifamily developments of five
Inclusionary zoning programs may allow a units or more to be affordable. Since the adop
builder greater flexibility in regard to de
tion ofthe ordinance, 1,400 affordable units have
sign requirements,such as length ofsetbacks
or parking spaces required per imit. For
ex^ple,in Montgomery County,Md.,flex
ibility may derive from reduced closet space,
unfinished basements, cheaper materials,
and off-curb-parking in lieu ofcovered ga
been created for low-, very-low^ and moderateincome families. Petaluma's program offers
developers four options: they can produce af
fordable units; provide land for developing the
units; pay an in-lieu fee; or present an "innova
tive idea"for some other form ofcontribution.^^
rages for affordable units.
Another example of a successfiil inclusionary
"Inclusionary
zoning is in
widespread use
in California. By
1994,64 cities
Direct subsidies
zoning program can be found in Montgomery
As an added incentive to produce affordable
housing,cities may provide direct payments
for infrastructure, affordable housing grants
or financing at reduced rates. They may also
assist developers to secure funds from ap
plicable state programs.
County, Md. near Washington, B.C. In 1974,
county officials enacted a 15 percent
inclusionary requirement. In 25 years since, the
program generated over 10,500 units ofafford
able homes,townhouses and apartments for sale
and rental. The qualifying household income
ranges from $16,000 to $40,000.
and counties in
the state had
Inclusionary zoning is in widespread iise in Cali
adopted some
fornia. By 1994, 64 cities and counties in the The county's housing commission owns many
state had adopted some form ofit. To date,these of the homes rented to extremely low-income
form of it."
efforts have produced more than 23,000 new, families. These houses were sold to the housing
affordable units statewide.
commission by the developer at cost (roughly
one halfofsale price). Land cost is notincluded
One example ofa successfiil program is in Irvine, in these cost calculations due to a 15 percent
which enacted a25 percent inclusionary require density bonus offered to the developer. To se
ment in 1984.In the first ten years, the program cure subsidies for these homes, Montgomery
generated a total ofapproximately 3,000 afford County often takes advantage of low income
able units. Since 1994, the City of Irvine has housing tax credits, as well as state and county
lowered its inclusionary goal to 15 percent mid bonds. While there are no construction subsi
generated 390 additional new housing units for dies provided to apartment unit developers,there
very low-income families. Because some afford are ongoing subsidies to maintain affordability
able imits have been converted to market rate requirements on apartments in the form ofprop
units, the total now approximates 3,200.?.^
erty tax relief for the affordable units. To pro
vide rental houses to extremely low-income
The inclusionary housing policy in Petaluma in households, the program leverages section 8
Sonoma County requires 10 to 15 percent ofall subsidies.^"*
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Policy Briefs:Silicon Valley Equity Series
Options
ng
Today, eight out of Silicon Valley's 14 munici
palities, including Sunnyvale, Los Gatos, Palo
Alto and Cupertino, have implemented below
TABLE 3: Improved Land costs in Mid-Coyote Valley
a)Developable acres
Total acrqs
Acres reserved
Acres reserved
Acres reserved
Total developable Developable
market rate housing programs. Sunnyvale
adopted an inclusionary zoning ordinance in
1980. It requires that ten percent of new hous
in Mid-Coyote
for drainage and
flood plain
for schools and
for streets(1)
acres
250
25
ing be built for moderate-income, LI, and VLI
Cost per acre (2) Canying costs, Total land cost
insurance, other per acre
costs per acre '
households. The program has already created
774 affordable units.*
1,700
paries
acres as %
of total
214
1,211
Totailand cost
Total
Infrastnjcture
per developable
acre (3)
Infrastructure
rfostsper
developable
71.25
b) Costs
costs
acre
40,000
40,000
80,000
.112,281
100,000,000 82,559
Total cost per developable acre w 194,840
1 ^Acres reserved for streets equals 15% of total acreage minus acres reserved for flood plain and
Inclusionary zoning can have only limited ben
efit if it is applied to jurisdictions that are close
to build-out. If only a small number ofunits re
main to be constructed in a city, then develop
ing 15 percent or even 20 percent ofthose units
as affordable housing will have only a minor
sctiools.
2. Cost per acre of land Is calculated based on average land value, as recorded by the County
Assessor, for land parcels purchased between 1990-2000.
3. Calculated by dividing 80,000/acre by 0.71 (proportion of total that Is developable), thereby
passing on'land costs to the developable parcels,
4.Total land cost per acre plus total Infrastructure cost per acre.
TABLE 4: Cost per 2 bedroom,2 bath condominium unit
impact. However, the possibility exists of ap
plying inclusionary zoning to San Jose's MidCoyote Urban Reserve. City officials beheve that
the Mid-Coyote Valley has the capacity to be
Mid-Coyote: 100 units on 4.5
infiii: 100 units on 2
acres; 25 units per acre;'
acres; 50 units per acre;
beiow-ground parking
on-grade parking (0.5 acre)
Size in square feet
improved iand cost(1)
On-site improvement(2)
come an "urban village" of25,000 households.
Hard construction costs (3)
IfSan Jose adopted an inclusionary requirement
of20 percent, that urban reserve could generate
5,000 much-needed affordable housing units.
Public fees
Soft costs (4)
Contingency fund (S)
Reserves (6)
1,150
$8,768
$16,500
$138,000
$20,000
$20,700
$5,750
$6,900
Developers fees and
construction management(7) $59,400
$276,018
$330,000
$53,982
Total cost
Sale price
1,150
$22,000
$17,500
$157,550
$20,000
$23,633
$5,750
$6,900
$63,000
$316,333
$350,000
$33,668
Profit
1. Improved land cost refers to land cast plus some fatflor for infrastructure costs. See Table 3for
calculations.
2. On-site improvements are estimated as 5% of the sales price.
3. Hard construction costs are estimated to be $120/sq.ft for Mid-Coyote.
They are $137/sq.ft. for infill units, due to the greater costs of underground parking and higher multi
story construction.
4.Assumed to equal 15% of hard costs. Soft costs include architectural, engineering, contractor and
developer overhead,financing, and sales/marketing costs.
5. Contingency funds are $5.0/sq.ft.
6. Reserves are $6.0 sq.ft.
7. Developers fees and construction management are 18% of the sales price; development fees are
15%,constnrction management is 3%.
'
578 rental, 196 ownership.
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EVERYONE'S
VALLEY
example, in the Mid-Coyote Valley the resources
Evaluation
per unit provided by either private or public
Public Costs
sources needed to produce an apartment afford
With the exception of administrative expenses,
inclusionary zoning ordinances do not require
city expenditures. However,poHcymakers could
choose to assist developers in meeting the
ordinance's requirements. Such public expendi
able to an ELI household are $179,946 (see Table
10 ). If the City of San Jose elected to use RDA
resources to subsidize 50 percent of those costs
and the program produced 1,677 ELI units, then
tures can be justified if an inclusionary zoning
policy attempts to reach extremely low-income
households.For example,the City ofSan Jose's
current pohcy offee waivers for affordable hous
ing projects ihight result in lost revenue of ap
proximately $1,000,000 for a 100-unit afford
able apartment project. A city can also directly
subsidize units as part ofan inclusionary zoning
program with redevelopment or other funds. For
$149,984,991.
1
TABLE 5: Condo affordability gap per unit
1 a) MId-Covote
50%
27,356
93,341
over 30 years (1)
Down payment(2)
16,500.
Total owner contribution 43,856
Total development cost o) 276,018
Gap
-232,162
109,841
276,018
■166,177
16,500
207,841
276,018
■68,177
b) Infill
I
■
Affordable mortgage
50%
(ELI upper-bound)
27,356
over 30 years (4)
Down payment (S)
17,500
44,856
Total development cost (6) 316,333
Gap
■271,477
Total owner contribution
m
'
sorb costs associated with the generation of
specified numbers and types of affordable units.
While the details of individual projects will al
ways vary. Tables 8 and 11 illustrate in general
the costs associated with a 20 percent
tables also indicate how these costs wiU vary
depending on the mix of income levels the pro
gram is designed to benefit.* Examples for an
in-fill project and for a project in the Mid-Coy
1
30%
inclusionary zoning requires developers to ab
two-bedroom condominium complex. The
191,341
■
16,500
Independent of any public incentives offered,
two-bedroom apartment complex and a 100 unit,
80%
(ELI upper-bound) (VLI upper-bound) (LI upper-bound)
Affordable mortgage
Private Costs
inclusionary zoning requirement for a ICQ unit,
I
30%
the cost to the RDA program would be
ote Urban reserve are included. Tables 6,7, and'
(VLI upper-bound)
80%
(LI upper-bound)
8 illustrate that developers can expect a healthy
93,341
191,341
return on their cash investment.
17,500
110,841
316,333
■205,492
17,500
208,841
316,333
■107,492
Scale
^
When inclusionary zoning policies apply to in
fill sites, they are often limited to larger projects
1 Assumes 7.0% interest rate.
2 Down payment Is 5% of market rate sale price of $330,000.
3 See Table 4 for calculation of development cost Total development cost equals constnjctlon costs
plus developer fees and constniction management
of 50 units or more. Based on this criterion, the
4 Assumes 7.0% Interest rate.
would generate nearly 3,000 units in San Jose
adoption of inclusionary zoning for in-fill sites
5 Down payment Is 5% of market rate sale price of $350,000.
6 See Table 4 for calculation of development cost
1
j
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New Housing
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[20
* See Tables 5 and 10 for calculations of the capital gap per unit.
and 660 in Santa Clara,the two major cities that
currently lack inclusionary zoning programs.^^
TABLE 6: Cash on cash analysis per market rate unit m
Developer's Expend itures
for affordable housing from its Redevelopment
Agency. The Fair Share Housing Inventory in
8,768
On-slte improvements 16,500
25% of all other costs 62,688
87,956
Sub-total
5,459
Carrying costs of
construction loan (2)
1998 indicates that between 1988 and 1998,
Total
The City of Milpitas receives substantial funds
Amount of Construction Loan
Total development
276,018
Improved land cost
costs
Subtotal of developer's 87,956
expenditures
Construction loan $188,063
$93,414
Milpitas produced affordable units that satisfied
24% ofVLI need and 59% of LI need. These
efforts leave room for significantly increasing
the production of affordable units.-^ The city
should assess available vacant land and current
need to evaluate inclusionary zoning as one strat
egy for generating affordable housing.
Developer's Return
330,000
188,063
Sale price
Construction loan
(Sale price construction loan)
141,938
Total developer
93,414
expenditures
1 Cash on cash return 52%
j
1 Cash on cash analysis compares the cash return against the developer's cash expenditures.
2 Carrying costs equal 2% of the borrowed amount plus 9.5% interest over two years.
As noted, if the San Jose Urban Reserve is de
veloped as a higher density "urban village," it
may include as many as 25,000 units. As a re
sult, a 20 percent inclusionary zoning require^
ment would thereby generate 5,000 affordable
units. If the inclusionary zoning policy divided
those units equally amongst ELI, VLI, and LI
households, the majority of those units would
TABLE 7; Cash on cash analysis
per 100 unit complex in Mid-Coyote
180 units at market rate, 20 units at VLI
|
Revenue to developer after
paying off construction loan
11,452,370
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
23%
necessarily be apartments or condominiums.
80 units at market rate, 10 units at VLI
Longevity of Benefits
Inclusionary zoning measures may require deed
restrictions that assure continuing affordability
for 20 to 30 years or on a permanent basis. For
example, Palo Alto's program preserves the
affordability of an ownership unit for 59 years.
If, during that time, the property is sold, the
affordability is extended for another 59 years.
Ifthe occupant sells the property after 59 years,
affordability is not preserved.
and 10 units at LI
Revenue to developer after
paying off construction loan
11,942,370
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
28%
1
80 units at market rate, 20 units at LI|
Revenue to developer after
12,432,370
paying off construction loan
(developer pays half of capital
gap for affordable units)
Developer's cash expenditures
9,341,400
Cash on cash return
33%
New Housing
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1
TABLE 8: Condo capital gap vs. developer profit
Inclusionary zoning policies may target any in
for 100 unit complex
a) Mid-Coyote
ELI
YLl
come level. For example. Table 12 describes a
Li
-68,177
Capital gap (1)
-232,162
-166,177
Profit per market rate unit $53,982
80 Market rate, 80 Market rate, 10 LI
20 VLI
iO.VLI,
Net profit for 100-unit complex $2,656,790
$3,146,790
Benefit to ELI and VLI Residents
plan for Mid-Coyote that would produce 1,667
ELI, 1,666 VLI, arid 1,667 LI units. However,
1
econoniic analysis will indicate those levels at
which it is unreasonable to expect developers to
assuming the developer pays for
half the capital gap
absorb the fiill costs ofthe affordable units and
still maintain profitability.As Table 12 indicates,
Profit on sales (2)
8.3%
9.9%
b) Infill
ELI
-266,677
VLI ,
-200,892
construction of affordable imits will require
Capital gap (3)
Profit per market rate unit $33,668
80 Market rate.
Li
-102,892
packages including significant incentives and
external subsidies as well as developer contri
butions.*
20 LI
Net profit for 100-unil complex $1,664,520
Leveraging Other Resources
assuming the developer pays for
half the capital gap
Profit on sales
5.2%
1 Capital gap is calculated in Table 5.
.
2 Refers to the profit in relation to the sale price, not the investment.
For the VLI and LI units, development cost is used instead of sales price.
3 Capital gap is calculated in Table 5..
In order to offset the costs ofbuilding and main
taining affordable units,inclusionary zoning may
be combined with a wide variety of other pro
grams.Included among them are the following:
1
Section 8:
TABLE 9: Apartment capital cost per 2 bedroom,2 bath unit
ICQ units, 35 units/acre.
100 units, 50 units/acre.
Families that receive Section 8 vouchers or
4.5 acres, pn-grade parking
(0.5 acre)
2 acres, below-ground
certificates can be offered access to units
Size in square feet:
Improved land cost(i)
Hard construction costs (2)
1,150
$8,768
$138,000
1,150
$22,000
Public fees
Contingency fund (4)
On-site improvement(S)
$20,000
$20,700
$5,750
$9,661
$157,550
$20,000
$23,633
$5,750
$10,711
Total cost
$202,879
$239,643
Soft costs (3)
parking (INFILL.)
constructed through an inclusionary zoning
program. Some vouchers may be attached
to specific affordable units created through
inclusionary zoning,thereby assuring that a
federal subsidy wUI be continuously avail
able to the apartment complex.
1 See Table 3for caiculation of improved lahd cost.
2 Hard construction costs are estimated to be $120/sq.fL in Mid-Coyote.
For infill units, hard constiuction costs are $137/sq.fL due to underground parking and costs
associated with higher multi-story construction.
3Assumed to equal 15% of hard costs. Soft costs include architectural, engineering, contractor
and developer overhead,financing, and sales/marketing costs.
4 Contingency funds are $5.0/sq.fL
Low Income Housing Tax Credit
(LIHTC)2«:
The federal government provides states with
a credit of$1.25 per capita. This money is
earmarked for projects withj20 percent
5 On-site improvements are estimated as 5%,of all other costs.
1
* The income figure of $69,600 refers to 80 percent of median income,
which includes all three affordable housing categories under scrutiny.
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affordability of VLI or below. While there
■ '
i
may be competition among programs within
TABLE 10: Apartment capital cost vs. supportable
debt
CO
the state, non-profit developers in the Bay
Per unit monthly costs
Gross Operating Income
Area have won at least 16.5 milhon dollars
(Monthly rent)
in federal credits in the last two years.^^
These credits, while often unused by for-
Utility
Vacancy allowance
'
ss, 1
CO
Market rate 1 (1) Market rate II
p
ELI
VLI
653 .
1,088
2,200
2,500
33
54
110
125
545
1,034
2,090
2,375
75
(5% of GO!)
Effective Operating Income
profit developers, exist as an incentive for
(EC!)
those that choose to build affordable units.
1
Operating expenses
333
333
($4000/year per unit)
Net operating income (NOi)
Debt service (noi/i.2)
State of California:
i
Recognizing the high cost of developing
housing in California,the legislature autho
rized a state low-income housing tax credit
program to augment the federal tax credit
program. The state credit is only available
to projects which previously received,or are
Currently receiving, federal tax credits.^®
Bay Area non- profit developers have won
700
1,757
2,042
177
584
1,464
1,701
27
52
105
119
65
188
222
m
i
Reserves(5% of EC!)
1
Net cash flow
.
8.
Capital gap per unit - Mid-Coyote
Supportable debt
ELi
VLI
Market Rate
22,933 ,
75,666
189,682
202.879
-127,213
202.879
-13,197
ELi
VLi
Market Rate
75,666
220,389
(assumes 8.0% interest rate,
25 year loan period)
Development cost per unit la 202.879
-179,946
Capital gap per,unit
Capital gap per unit - iiifiii
at least 12.7 million dollars in state credits
Supportable debt 22,933
in the last two years.
(assumes 8.0% Interest rate,
25 year Ipan period)'
CO
CO
$239,643
Development cost per unit (s) $239,643 $239,643
CO
-216,710 -163,977 -19,254
Capital gap per unit
In addition to California's LIHTC program,
California voters have,in the past,approved
1 Market rate 1 refers to apartments In Mid-Coyote; Market rate II refers to apartments downtown or
general obligation bonds for low-income
In other Infill sites.
housing development. Thotigh approv^ is
3 Calculated In Table 9.
2 Calculated In Table 9.
Note: No LI apartments are proposed for Mid-Coyote or Infill sites. All LI units proposed are
unlikely duripg the present electricity cri
sis, those measures could receive a favor
212
condominiums.
1
able response from voters in the future. The
^California DepartmentofHousing and Com
munity Development also operates a $60
million multi-family rental and transitional
housing program, which could be accessed
for affordable housing in Silicon Valley.
subsidies for below market rate hbusing.
While much ofthat money is earmarked for
current programs,additional funding niay be
available as tax increment levels increase to
subsidize part ofthe cost ofaffordable hous
ing. Together with state bonds, these funds
RDA:
As previously noted,state law requires that
20 percent ofRDA funds be used to provide
could be dir^ct^to the housing most diffi
cult to subsidizesiWts at affordability of30
percent ofn^diaf,or ELI.
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Housing Trust of Santa Clara County;
HTSCC has dedicated one third of its re
TABLE 12: Total resources needed
sources to help finance affordable units in
for 5,000 affordable units In Mid-Coyote
Units
Total capital gap
San Jose. Given the large subsidies these
units require, the HTSCC's program ofgap
financing can fill the "holes"-between afGsrdable rents and development costs that other
subsidies may not completely cover.
1
1667 Li condominiums
$299,969,982
$105,968,429
$138,425,441
$113,651,059
Total resources
$658,014,911
m
1667 ELI apartments
833 VLI apartments
833 VLI condominiums
SlBiiig
TABLE 11: Capital gap per 100-unlt apartment complex
Feasibility
Mid-Coyote
As noted, inclusionary zoning programs have
20 ELI units,
10 ELI, 10 VLI,
80 market rate
80 market rate
Capital gap for complex
4,654,680
Present value of cash flow from rents (i) 10,787,498
Present value of sale price of complex 17,351,048
4,127,350
10,939,548
17,664,936
after 25 years (2)
Annual rate of return
13.27%
13.89%
Infill
20 ELI units,
10 ELI, 10 VLI,
80 market rate
80 market rate
Capital gap for complex
-5,874,520
11,748,023
19,992,251
-5,347,190
12,248,081
20,306,139
12.76%
13.30%
been adopted in over 60jurisdictions in Califor
nia and eight in Silicon Valley. The strategy has
a proven track record, and a number of model
ordinances are available for review and/or modi
fication.
Present value of casti flow from rents i
Present value of sale price of complex
after 25 years i4)
Annual rate of return
1 From separate cash flow chart, not shown.
2 Sale price of complex Is the net operating Income In year 25, divided by a capital rate of 8%..
The capital rate for a complex ranges from 6.5% to 8%;the latter produces more conservative
results.
3 From separate cash flow chart, not shown.
4 Sale price of complex Is the net operating Income in year 25, divided by a capital rate of 8%..
iSlSlBv^W
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half the capital gap for 20 VLI units in a 100
unit complex was subsidized with tax credits and
the other half with developers' profits, 20 units
impleineriting indusiooary
Zoning
could be offered to VLI families with the devel
oper still earning 8.3% profit on sales.**
Mid-Coyote Valley
Given that the urban reserve is undeveloped,
developers can be offered greater flexibility in
Inclusionary zoning in Mid-Coyote offers the
opportunity to achieve much larger numbers of
affordable units than virtually any other feasible
strategy. Assuming build-out is 25,000 units, a
20 percent requirement equally distributed
amongst income categories would generate
design and density to offset some ofthe costs of
the affordable units. If density bonuses may not
be of value in the region (because of the initial
high densities planned for the area), another in
centive may be to hnk the inclusionaiy require
ment for VLI or ELI famiUes to the opportunity
1,667 ELI, 1,666 VLI,and 1,667 LI units.
to build single family detached housing in the
urban reserve. Single family detached housing
The relatively low land costs in the urban re would likely be included in the "urban village,"
serve will allow developers to absorb much of and the opportunity to participate in those de
the price of an inclusionary requirement. The velopments could be targeted to those who have
average cost ofland purchased since 1990 is only met the inclusionaiy requirement.
$40,000 an acre,while the cost ofresidential land
in central San Jose is approximately $1,100,000 Despite the relatively low land costs in Midan acre.* Thus, even including the substantial Coyote, it is not reasonable to expect develop
infrastructure expenses associated with opening ers to fully absorb the costs ofELI units, all of
the region to development, the land costs per which are likely to be apartments. Table 12 in
dwelling unit are $8,768 compared to $22,000 dicates that the total resources needed for 1,667
per unit in more developed areas.
ELI units will be $299,969,982. Ifthe city chose
to accept the obligation for halfthis amount, it
While land costs in the Mid-Coyote Valley are
would need to commit $150 million to the ELI
relatively low, the price of homes that can be
program.
built on that land has risen dramatically. The
results ofcombining these factors are shown in
Tables 3 and 4.Even including management and '
This excludes land purchased prior to 1990 at even iower prices. In
development fees at 18 percent of sales price,
the cost of constructing a condominium equals
$276,018. The market price of such a unit is at
least $330,000. Under this scenario a developer
would enjoy a surplus of $53,982 per unit. If
fact, between 15-20 percent of the land In Mid-Coyote Valley was
purchased over 20 years ago. 50 percent of the land was purchased in
1995 or earlier, according to County Assessor records.
"See Table 8.
This amount can be compared to unaiiocated growth in the RDA
housing program: $85,900,000 of bonded revenue from 2001-2005
growth, and, if RDA is extended, an additional $50,000,000 of the five
percent TIF from 2005-2010. Thus, almost all of the 50% subsidy
could be covered by RDA funds
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40
The remainder ofthe cost ofELI units would be
generated from Section 8 projects, the Califor
increasiiig The
Percentage of
nia Multi-Family Housing Program or other RDATax increment
forms of state assistance, tax credits, RTF con Allocated To
tributions and reductions in developer cash flow. Affordable Hoysing
San Jose and Santa Clara
Inclusionary zoning is more difficult to imple
ment in in-fill sites because projects must be
compatible with existing infrastructure and
neighborhood characteristics. As a result, it is
prudent to apply inclusionary zoning only on
large sites, where the potential scale of afford
able units generatedjustifies the challenge ofthis
strategy.
Redevelopment agencies are likely to remain the
primary source offunds available for affordable
housing in the region. San Jose already allocates
nearly 25 percent ofits tax increment to afford
able housing, but it could be raised to 30 per
cent. This increase is particularly important
given the city's new and much needed emphasis
on housing for extremely low-income residents.
As noted in Option 3, Subsidized Housing, a
number of other cities in the region also have
San Jose has nearly 60 sites that can accommo
redevelopment agencies, albeit much smaller
date 50 units or more.A 20 percent inclusionary than San Jose's. Increasing the housing alloca
requirement could generate 2,958 affordable tion from 20% to 30% in each of these cities
housing units. Santa Clara has eight such sites; would produce a total of$19.1 million a year in
a 20 percent requirement applied to them would tax incremerit for affordable housing.
produce 660 units. As indicated in Table 13,the
An evaluation of the extent to which the RDA
cost of this approach would approximate
allocation could be increased should be related
$540,322,560.*
to the anticipated growth of tax increment. An
increase to 30% could be siistained even if tax
The costfor developing 5,000 units in Mid-Coy- increment growth stabilized at 5% per year. If
~ ote Valley would be $650 million. When com
growth should be higher, as it has been during
bined with the $550 million, the cost of devel peak periods in the history of San Jose's RDA,
oping 3,600 units in infill areas, the total cost an increase above 30% would be warranted.
for an inclusionary zoning initiative would be
$1.2 billion.
* This estimate is based on the following housing unit allocation: 20
percent ELI apartments,40 percent VLl apartments, and 40 percent Li
condominiums. See Table 10for figures used to calculate.
Meeting the
Need for Housing
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Increasing Supplies of
Market Rate Hoysing
Theoretically, a massive increase in the supply
ofmarketrate housing would cause prices to fall,
increasing affordability. However, this market
dynamic is extremely unlikely to occur in Sili
con Valley. First, future job growth will dwarf
all projections ofhousing growth.The Associa
tion of Bay Area Governments'(ABAG)pro
jections indicate that Santa Clara County will
see approximately 231,000 morejobs created by
the year 2020.^' However, housing construc
kind will be valuable to a portion ofthe region's
growing workforce,permitting economic expan
sion to continue and offsetting price inflation.
However, with demand for housing projected at
112,000 to 146,000 units over the next20 years,
this gain would meet only 50 to 65 percent of
projected need. To meet growing demand, the
SVMG report recommends changing land use
policies to accommodate more units. These
changes could produce an additional 36,700
tion is expected to increase by only 74,30O imits units; an improvement,but one that barely meets
in Silicon Valley, defined as Santa Clara County the predicted demand. In consequence, it can
and parts of Santa Cruz, San Mateo, and not reduce the existing shortage or bring down
Alameda Counties.^® Secondly, since the re excessive prices associated with it. .
maining land available for residential develop
mentis relatively small,even rapid development
of vacant parcels will fail to haye a major im
1,
pact on the price of the much larger developed
TABLE 13:
base.
Total resources needed for
3,600 infill apartments and condominiums
in San Jose and Santa Clara
Comparing the possible construction of new
units to the increased demand for housing re
veals that reliance on market forces alone will
Units
Total capital gap
720 ELI apartments (i)
1440 VLI apartments
$156,031,200
1440 VLI condominiums .
exacerbate the housing crisis for the next two
Total resources
1. ELI units are 20% of the total here (as opposed to 1/3 In the
Mid-Coyote proposal) due to the much higher cost of ELI Infill
decades. In 1999, the Silicon Valley Manufacturinjg Group(SVMG)evaluated the amount of
land available for residential construction in Sili
$236,126,880
$154,788,480
$546,946,560
constmction.
\
i
con Valley. Given current land use regulations,
it was projected that 74,300 units could be added
before "build-out" occurs. An increase of that
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Benefit to Extremely Low-Income and
Very Low-Income Residents
Public Costs
Market rate units are priced at levels well above
Market rate housing is built without direct pub
the incomes of extremely low-income and very
low-income residents. Even a family at the up
lic subsidy. However,because California's pub
lic finance system severely limits taxes on real
estate,.housing development cannot pay for the
basic municipal services required ofa unit's resi
dents. For example, as noted in the previous
section"A Crisis of Our Own Making", the to
tal ofproperty tax for San Jose in 2000 equaled
half of the police department's operating bud
get. As a result,expanding the market rate hous
ing supply requires indirect subsidies either in
the form oftaxes on other activities (retail sales,
use ofutihties,etc.)or in areduction in per capita
levels of public services.
per end ofthe VLI range, earning 50 percent of
Private Costs
Feasibility
Private sector firms provide market rate hous
Opposition to marketrate housing developments
ing through their own investments and financ
tends to derive from two sources.As previously
median income($43,500) would spend over 50
percent of its gross pay for an average apart
ment.*
Leveraging Other Resources
Increasing the supply of market rate units does
not leverage resources for affordable housing in
any areas except Redevelopment Project areas
that employ tax increment financing. In those
areas, 20 percent of property tax increment is
reserved for affordable housing.
ing strategies. Through fees, these units pay for noted, city governments are discouraged from
public infrastmcture directly related to new de
approving new developments because of their
tax consequences. In addition, neighborhood
groups often oppose new developments,particu
larly those of higher density, fearing impacts
Scale
Given current land use policies, no more than such as traffic congestion,increased hbrary and
74,300 new units could be developed in Santa park usage, etc. These pressures may reduce the
actual amount of new construction below the
Clara County.
Silicon Valley Manufacturing Group's estimate.
velopments.
Longevity of Benefits
The price of market rate units varies with the
dynamics ofsupply and demand.Although these
will rise and decline to some extent in relation
ship to business cycles, the severe structural
imbalance between supply and demand in the * Average rent on an aparfmenl in Santa Clara County in December
2000 was $1,903, or $22,836 annually. Average rent includes below
region suggests that prices will continue to rise. market rate and rent controlled apartments. Tfiere are no figures for
average market rate units; however, two bedrooms often start at
$2,500.
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In FY 2000, San Jose's RDA produced annual
tax increment in excess of$140 million. In ad
Sybsldfzed Housing
dition to 20 percent ofthis annual tax increment,
the San Jose City Council allocated another $10
)
million in RDA resources for affordable hous
ing. When combined with a small amount of
federal and state support, these resources wiU
enable the San Jose Housing Department to al
The provision ofsubsidized housing from either
public or private sources is the principal strat
egy currently used in Silicon Valley. Increasing
our community's reliance on it further hinges
on the extent to which new subsidies can be gen
erated. The major current sources for suljsidies
are rioted below.
locate $240 million to fund the construction of
6,000 affordable units by 2004.^'
Other cities in the region also have RDAs. Their
tax increment, however, is much smaller.
In FY 1999-2000, the RDA tax increment rev
enues ofother cities in the county in milhons of
RedevelopmentAgencies
dollars reached the following levels:
Redevelopment agencies, or RDAs, are man
dated to eradicate blight in Cahfomia's cities.
They do so by accumulating property taxes in
Milpitas
24.2
Santa Clara
17.4
Morgan Hill
14.1
Redevelopment Project Areas, bonding these
Campbell
2.4
revenues and investing the bond proceeds in new
Mountain \Tew
1.58
buildings and infr^tructure. Under state law,
Sunnyvale
2.08
RDAs must allocate 20 percent ofthe tax incre
2.017
Los Gatos
ment they receive for low- and nloderate- in
come housing. Using these resources, over the Based on the legal requirement that 20 percent
past 13 years, the City ofSan Jose and the local of tax increment must be allocated for afford
redevelopment agency have invested $317 mil
lion to build more than 10,000 units of afford
able housing. More than 85 percentofthese units
went to families earning less than 64 percent of
the median local income. Because they seek to
able housing, these cities together could gener
ate $12.28 million for affordable housing devel
opment.*
Two factors inhibit availability of San Jose's
leverage the RDA investment, during the past RDA funds. First, current San Jose tax incre
six years alone,local officials have also secured ment revenue has already been bonded to se
almost $175 million in tax credits and $3.7 mil cure the funds needed to meet the city's 6,000-
lion in tax exempt bond authority for affordable
housing development.
•12.8 million Is derived from 20 percent of the total RDA tax Increment
for all cities.
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TABLE 14:
Additional 5% of San Jose RDA revenue available, 2006-2010
TiFd)
01-02(base year) $149.055.072
$162.392.494
03-04
$173,315,543
02-03
04-05
181,659,454
05-06
190,742,427
200,279,548
06-07
07-08
210,293,525
08-09
220,808,202
09-10
Growth in TIF
$13.337,422
$10,923,049
$8,343,911
$9,082,973
$9,537,121
$10,013,977
$10,514,676
$11,040.410
80% of growth
$10,669,938
$8,738,439
$6,675,129
$7,266,378
$7,629,697
$8,011,182
$8,411,741
$8,832,328
20% of growth
$2,667.484
$2,184,610
$1,668,782
$1,816,595
$1,907,424
$2,002,795
$2,102,935
$2,208,082
20% of growth
bonded P'
Additional 5% of
TIF (3)
$23,195,517
$18,996,607
$14,511,150
$15,796,474
$16,586,298
$17,415,613
$18,286,394
$19,200,713
$8,119,624.70
$8,665,777.15
$9,082,972.70
$9,537,121.34
$10.013,977.40
$10,514,676.27
$11,040,410.09
$11,592,430.59
231,848,612
Total
$1,720,394,877 $82,793,540
$66,234,832
$16,558,708
$143,988,765 $78,566,990
1 TIF estimates from RDA 2002-2004;Annual growth 2004-2010 estimated using 5% average growth rate peryear
2 includes 1.15 coverage ratio
3To reach this amount,funds could be taken from bonded proceeds(column 4), or, if TIF growth is substantially higher than these projections,from 80% of growth in tax
incrementfunds directly(column 5)
unit target. As a result, the 20 percent oftax in
to be available after 2005, legislation must be
crement fundSaefimds earmarked for affordable introduced to allow the RDA to collect tax in
housing for tn&iiext 30 yearsaehave already been crementfunds for an additional period ofyears.*
allocated.Additionally,since the RDA is legally
required to issue no future debt after 2004, the Against this backdrop,the potential for signifi
City of San Jose caimot commit tax increment cant RDA resoiurces in the fiiture clearly exists.
funds above 20 percent after 2005.
However, there is another strategy available to Evaluation
secure RDA money for affordable housing. Cmrent RDA policy dedicates 25 percent oftax in
Public Costs
crement to affordable housing;raising this level All RDA revenues are public funds. Since they
to 30 percent or greater could generate over $8 can be used for other capital projects which ben
million annually. The mechanism ofincreasing efit blighted areas, RDA dollars allocated for
ftmding as well as the amount should depend on housing that exceed the legally mandated 20
the rate of growth of tax increment dollars. If percent impose an opportunity cost on the com
the growth rate is projected to be consistently munity.
high, then a percentage of tax increment could
be allocated directly to housing. However, if
growth is sluggish, more revenue could be gen
erated from taking the additional 5 percent from
the proceeds after the city bonds tax increment
growth. Either way,for the additional 5 percent
'See Table 14.
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28
Private Costs
units affordable to ELIresidents. This year,how
Private housing developments in redevelopment ever,the San Jose City Council chose to increase
areas are required to provide 15 percent oftheir funding for housing for ELI families for a oneunits for low-to-moderate income households. year period.
Also, the RDA can seek to negotiate subsidies
for affordable housing from private developers Leveraging Other Resources
when it invests public funds in their projects
RDA funds are often combined with tax credits
or other sources of capital to increase the nrunWhile subsidized housing projects vary in their ber ofaffordable imits in a project. On average,
\J
costs, San Jose's RDA strives to use its invest the San Jose Housing Department achieves a
ments to encourage developers to create as many leverage ratio of three. In many cases, a major
affordable housing units as possible. Based on source ofadditional financing is federal and state
past experience, for every $10 million of RDA low-income tax credits. However, competition
resources allocated,the city is likely to generate for tax credits is tight. In 2001, the State's first
either 254 LI units or 209 VLI units. The eco
nomics ofELI units are more complex.Because
aflfordable housing payments by ELIfamilies are
so low, the combined financing sources in a
project are often inadequate to cover the needed
subsidy. Therefore,the other units in a complex
round allocation oftax credits for multi-family
projects indicated $393.87 million would be
available. Total applications exceeded $660 rnillion. Despite stiff competition, over the last six
years San Jose has seemed $176 million in tax
credits.
essentially help subsidize the ELI units. Under-
these circumstances,the number ofunits gener Feasibility
ated will depend on the specific characteristics An extension ofthe bonding capacity ofthe San
j
of a project.
Jose RDA beyond 2004 depends on state legis
lative action.Ifthe extension is granted,it could
Benefit to VLI and ELI Residents
include an expansion ofthe portion ofthe RDA
RDAfunds can be targeted towards VLI and ELI tax increment used for affordable housing. Both
residents. However,in the absence ofadditional state legislators and Santa Clara County officials
funding,there is ah inverse relationship between may press to increase it beyond the current 20
the number ofELI units constructed and the to
percent requirement.
tal number of affordable units developed. For
example, $10 million coiild generate 209 VLI
umts. Based on average city subsidies for ELI
umts(other than single room occupancy),ifone
third ofthat subsidy were allocated for bousing
affordable to ELI families, the total number of
units created would drop to 169.* In the past,
the RDA has placed little emphasis on creating * $39,000 for LI; $47,700 for VLI; $116,000 for ELI;figuresfigg^ar^^
Jose Housing Authority.
New Housing
Options
EVERYONE'S
VALLEY
The Housing Trust
3,000 units. With available funding of $6.67
million, 3,000 units would receive an average
The Housing Trust of Santa Clara County subsidy per unit of approximately $2,250. For
(HTSCC)is a public/private partnership, coor this strategy to be effective,it will be necessary
dinated by the County of Santa Clara, Sihcon for other sources to provide the substantial sub
''^^ey Manufacturing Group, Collaborative on sidies needed to construct apartments affordable
Ifiislng and Homelessness and Community
rOundation Silicon Valley for the purpose ofrais
ing funds for affordable housing. Over the past
to ELI households.
21 months, the HTSCC has raised $19.1 mil
Evaluation
lion, with two thirds coming from the private
sector and the remainder from public funds.The Public Costs
HTSCC has a current goal of raising $20 mil The Housing Trust Fund has received contribu
tions from the following public entities:
lion.
HTSCC leaders plan to allocate these funds
City ofSan Jose
$1,000,000
equally to address the following three different
housing priorities: the construction of new, af
fordable rental units; assisting first-time home
buyers through low-interest loan opportunities;
and offering homeless people transitional assis
tance and longer-term placement in more stable
Santa Clara County
$1,000,000
City of Milpitas
$500,000
City ofPalo Alto
$500,000
City of Sunnyvale
$500,000
City of Campbell
$250,000
City of Cupertino
$250,000
housing. With $6.67 million,the HTF estimates
Town ofLos Gatos
$250,000
its "First-Time Homebuyers" program can as
City of Santa Clara
$250,000
sist as many as 800 families achieve home own
City of Morgan Hill
$100,000
ership.Another $6.67 million will provide fund
ing for the development oftransitional housing
and shelter for roughly 1,000 homeless persons.
Town of Monte Sereno $15,000
Private Costs
Corporations have contributed $12.8 million to
It should be noted that the Housing Trust does the HTSCC.Adobe Systems,Advanced Micro
not intend to be the primary ftmder for building Devices, Applied Materials, Cisco Systems,
new, affordable housing. Instead, it will focus Hewlett Packard,Intel and Knight-Ridder have
on"gap"financing exclusively for non-profit de
velopers, using its resources to make up the dif
ference between funds generated from other
each contributed at least $1 million.
Scale
sources and the full cost of the project. The By using $6.67 million to provide"gap"financ
HTSCC estimates it can provide this tjqje of ing,the HTSCC provides low/no interest loans
"gap"financing to help complete approximately to a large nmnber ofunits.
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Policy Briefs:Silicon Valley Equity Series
New Housing
Options
Longevity of Benefits
Since the HTSCC is not.a>nriniary funder for
apartment constructionnti^not attemptto stipu
late the length of time projects will remain af
fordable.
Benefit to VLI and ELI Residents
The HTSCC intends to target its funds for new
construction towards 3000 individuals and fami
lies with 40 to 60 percent ofmedian income. Its
homeless assistance program will benefit ap
proximately 1,000 extremely low-income
people.
Leveraging Other Resources
The HTSCC intends to leverage its resources by
combining its funds with tax credits and subsi
dies from local, state and federal governmental
sources.As a result ofthe high subsidies required
for affordable ELI and VLI units, the HTF sup
port will be approximately only 1.25 percent of
the total subsidy for ELI units and 1.8 percent
ofthe total subsidy for VLI.*
Feasibility
With $19.1 million already in hand, the feasi
bility ofthe HTSCC reaching its $20 million dol
lar goal is excellent
* SeeiTable 10: calculations are based on WPUSA calculation of the
capital gap
New Housing
Options
WORKING PARTNERSHIPS I
Jr
EVERYONE'S
VALLEY
Creating New Housih^^ Option 4
Based on those estimates, a target can be set as
Tax increases for Affordable
follows:
Hoysing Development
Units
Subsidy
Apartments
1667 ELI apartments
$299,969,982
833 VLI apartments
$105,968,429
Additional revenues for affordable housing
could be secured by raising sales taxes, utility
833 VLI condos
$138,425,441
taxes, conveyance taxes or by issuing general
1667 LI condos
obligation bonds which can be paid for through
5000 total units
$113,651,059
$658,014,911
Condos
property taxes. In each case,the state constitu
tion requires such measures to be placed on the The discussion below evaluates the ability of
ballot and approved by a two-thirds vote.
various tax strategies to raise this amount ofcapi
tal.
Evaluotlon
Utility taxes
San Jose's utility tax of5 percent on gas, elec
tric, and inter-state phone biUs generated rev
Public Costs
By definition, any tax increase strategy gener enues of $53,426,000 in 1999. This amount is
ates fimds fi-om private sources for public pur expected to increase substantially as a result of
poses. The government acts as a conduit, man
aging the expenditure offimds. Minor adminis
rapidly rising prices for electric power and natu
ral gas bills. In order to generate $658 million,
trative costs are associated with tax increases.If the tax would have to incre^e to approximately
the tax is placed on the ballot at a regularly 11 percent. A tax of that scale would generate
scheduled election the costs ofadoption will be an additional $65.8 million, which, if used as
minimal.
debt service for revenue bonds, could produce
$658 million in capitalfor housing development.
Private Costs
In order to determine the potential size ofa tax Sales tax
increase for affordable housing construction, it The sales tax in Santa Clara County is 8 per
is necessary to establish the desired target num cent. On a countywide basis, taxable sales gen
ber of units and calculate the costs of subsidies erated $30,348,644,000 in 1999.^^ A county-wide
for those units. For the purposes of this analy increase in the sales tax by a halfofone percent
sis, the goal will be equal to the number ofimits would generate $151;743,220. Over the course
that might be generated in Mid-Coyote VaUey ofapproximately four years a halfcent tax could
through inclusionary zoning (see Table 12). generate $606,972,880 for housing development.
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New Housing
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Conveyance tax
Benefit to ELI and VLI Residents
San Jose's conveyance tax on real estate trans
The taxing agency can specify the proposed ben
actions produces $1.65 for every $500 of value efits to ELI and VLI residents in the measure
transferred. Tax receipts vary over time. While placed before the voters. The program noted
the number ofproperties sold changes in accor above would produce 1,667 ELI apartments,873
dance with business cycles, the value of real VLI apartments, 873 VLI condominiums and
property in the region tends to increase steadily. 1,667 LI condominiums.
Assuming that the current tax rate wiU generate
an average of$20 million a year, the tax would Feasibility
have to be increased to $6.60 for every $500 to The feasibility of singular tax increases of this
produce an additional $65 million. That amount, size being approved by two-thirds of the elec
in turn,couldbe bonded to secure a total of$650 torate must be considered problematic. For ex
million.
ample,to reach the $658 million target, convey
"Itwould bean
ance taxes would need to be increased four times.
General Obligation Bonds -property taxes Regarding utility tax increases, skyrocketing
error to'sell
Property taxes can be increased to pay for Gen electricity rates makes an increase in residential
eral Obligation bonds. As prescribed by Propo utility bills politicaliy unfeasible.
sition 13, property taxes are fixed at 1 percent
short'San Joise
ofassessed valuation,$677 million in 2000. To However,as demonstrated by last year's approval
reach $658 million, an increase of 7.76 cents of property tax-based bonds for parks, libraries
commitmentto
for every $100 of assessed value is required and flood control, San Jose voters are clearly
(about $310 annually for the average home willing to invest in the betterment oftheir com
owner). This would yield $52,530,000 munity. This is particularly true among middle
annuallysethe payments for a 30-year bond of and higher income homeowners who value the
$658 nullion.
families ond
their
improving the
quality of life in
Silicon Valley."
deductibility of property taxes fi-om their fed
eral income taxes. It would be an: error to "sell
Scale
short" San Jose families and their commitment
The number ofunits constructed wfould vary with to improving the quality of life in Silicon Val
the size ofthe tax increase. As noted above,the ley.
sample tax rates just described would generate
5,000 affordable units.
In a similar vein,the most popular form oflocal
Longevity of Benefits
levy, Santa Clara County's sales tax, is only
slightly above the statewide average. Last year,
Through deed restrictions, subsidized units can sales tax dropped statewide by a quarter ofa cent.
remain afibrdable for any specified period or
Silicon Valley voters could consider a t^jpt^-
indefinitely.
rary, four-year half cent county sales taxaethat
alone would generate enough capital to fmitf^lmost the entire project.
New Housing
Options
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EVERYONE'S
VALLEY
Protieclihg:^istihg;Housing:Pptibnill
Evaluation
Rent Control
Public Costs
The costs ofrent control laws are limited to ad
ministrative expenses and occasional legal ex
penses associated with litigation against local
ordinances.Fees on rental units generally cover
administrative costs.
Where their enactmentis permitted,sensible rent
controls can ejBfectively protect large numbers
Private Costs
of tenants against excessive rent increases. By The private costs ofrent control are principally
doing so, they prevent the existing number of the loss of excessive rent increases. Conceptu
affordable housing units from being reduced due ally, these increases represent the difference be
to price inflation. In this sense, while rent con
tween market rents and the rent levels estabhshed
trols do not "create" new housing, they allow in the local ordinance. Constitutionally,rent con
those programs that do construct new affordable trol laws must provide property owners with a
umts to increase the "net" supply of affordable fair and reasonable return on their investment.
housing in the region.
Scale
San Jose first enacted rent control over 20 years
ago. However, the city's ordinance exempts all
single family homes, duplexes, and apartment
umts built after 1979. Still, rent control pro
tects residents of approximately 44,000 apart
ments and 10,000 mobile home spaces. In gen
eral, the ordinance limits rent increases to eight
percent for apartments and three percent for
mobile homes. In stark contrast, last year rent
increases for exemptunits averaged 37 percent.*
Rent controls can cover substantial numbers of
tenants even within the limits of state law. En
actment ofrent control ordinances in Mountain
View, Palo Alto, Sunnyvale, and Santa Clara
could cover approximately 58,506 house
holds.***
Longevity of Benefits
Though rent control policies may be overturned
by future city councils or by voters through the
initiative process, their popularity once enacted
State legislation prohibits San Jose firom extend in Santa Clara Coimty is beyond question. In
ing rent control to units built after 1979. Other fact,no local rent control measure has ever been
cities that have never adopted rent regulations revoked or overturned.Rent control can be modi
cannot apply rent control to any housing built fied by state law or by court decisions that
after 1995. In most Silicon Valley cities,the vast
majority ofrental housing was built prior to 1995
ofiering the potential ofrestricting escalation in 'Rents increased 70 percent from 1996-2000; source: REALFACTS.
"Costa Hawkins bill adopted In 1995.
the housing costs for many renters.**
"•See Table 15.
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i4
modify previous interpretations ofthe constitu
tional protections afforded to property owners.
ii
TABLE 15:
Rent control and potential new rental units
1 a) Number of potential beneficiaries ot rent control
In addition, state law mandates that local rent
Current No.of
Estimate of No.
Average No.
apartments(i)
of apartments
of persons per
built before
control laws must include vacancy decontrol
.provisions. Vacancy decontrol permits owners
to raise rents to market levels whenever a tenant
voluntarily vacates a unit. Thus, over time, an
increasing percentage of imits move towards
market levels.
'
Benefits to VLI and ELI Residents
The majority of VLI and ELI residents of Sili
con Valley communities are renters. For these .
families, rent control offers the only safeguard
against being forced tp compete for the ex
tremely small number of new, affordable units.
However, rent ordinances have several limita
1995(2)
Mountain View
Palo Alto
Santa Clara
Sunnyvale
Total
17,000
7,274
16,439
23,000
63,713
15;470
6,474
15,453
21,160
58,557
potentially
household as of covered by
1990(3)
rent control
2.24
34,653
2.24
,
|
No. of renters
2.50
2.43
14,501
38,632
51,419
139,205
1
1 b) Number of potential new rental apartments before bulid-out 4
Mountain View
PaloAlto
Santa Clara
569
Sunnyvale
2825
Total
5553
|
1159
1000
1 Estimates of the current number of apartments units In each city were obtained from Planning or
Housing Dept. personnel In each city and California DepL of Finance projections. All numbers are
approximate.
2Assuming the proportion of the current stock of multlfamily housing built before 1995 equals the
proportion of the current stock of apartments built before 1995; data on new multlfamily
construction Is from the Constmctlon Industry Research Board. Because ofthe Costa-Hawkins law,
only apartments built before 1995 would be covered by a rent control ordinance.
3 According to the 1990 Census,as reported by www.baynet.com
tions. First, it is difficult for rent control laws to
4 Estimated for Sunnyvale and Mountain View assuming that the current proportion of apartments
reduce rents, as opposed to simply restricting
Alto Planning Dept. The figure for Santa Clara Is estimated using the January, 2001, vacant land
increases. Ifcontrols are enacted after rents are
survey prepared for the Home Builder's Association of Northern California.
will remain constant through the production of new units! Estimate for Palo Alto Is from the Palo
already prohibitively high in relation to ELI and
VLIresidentincomes,they can do no more than can easily increase rent beyond the legally man
stop a difficult economic situation from becom dated 8 percent per year with little fear oflegal
ing even worse.* Second,in San Jose mid some repercussions. In addition, as noted elsewhere
other cities, the burden for enforcing rent con in this report,by exempting units from rent con
trol rests with the tenant. Unless renters are edu
trol after they become vacant, state law creates
cated to their rights imder rent control,landlords an incentive to force long term tenants to leave
their units.
* Rent controls have only a limited ability to offer special protection to
low Income tenants. The US Supreme Court upheld provisions In San
Jose's rent policy to take Into consideration "hardship" to tenants when
establishing a legal rent level. However, this "hardship clause" could
only be considered after the property owner had been assured a rent
increase sufficient to provide a fair and reasonable return on his
investment [Pennell v. City of San Jose, 108 S. Ct.849(1988)].
Therefore, significant Increases could still be approved even If the
resulting rents were beyond a tenant's ability to pay.
Existing
Housing Options
!! 1'^
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■
Leveraging of Other Resources
Rent controls do not normally attract additional
resources for the development of affordable
housing. Some opponents have claimed that rent
control discourages private investment in new
Feasibility
Despite the financial clout ofthe rental housing
industry, the broad appeal ofrent control makes
its defeat anything but certain. Rent control or
dinances have been beaten in elections in Palo
rental housing. This assertion has little validity Alto, Mountain View,and Sunnjwale,while city
given the State's prohibition on rent control for councils in San Jose and Los Gatos have each
units built since 1995. Additionally, all of the approved apartment rent control. The Cities of
urban cities without rent control in Silicon Val
San Jose,Milpitas, Gilroy,and Morgan Hill have
ley(Palo Alto, Mountain View,Santa Clara,and mobile home rent control ordinances, and the
Sunnjrvale) are approaching build-out. It is es City ofCampbell has a Mediation Ordinance that
timated that only 5,500 apartment rental units discourages "excessive" rent increases and recan be built on remaining vacant land
tahatory evictions and provides mediation ser
vices to resolve rent disputes.'^ On two occa
sions in the past twenty years, industry cam
paigns to prohibit rent controls on apartments
or mobile parks throughout California have been
placed on the statewide ballot. Both measures
were soundly defeated.
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Existing
Housing Options
Protectihg%isHng Housii^^^
cannot be raised ifthe former tenant was evicted,
this restriction has proven to be essentially un
Jyst Cayse Eviction
7
enforceable. In this respect, through evictions
landlords gradually transfonh affordable units
into more costly ones.
To respond to this concern,at least twelvejuris
dictions in Cahfomia have adopted a "just cause"
Under California law,a landlord is not required eviction policy.* While these measures may
to have justification for terminating a tenancy. differ in detail, they have as a core element the
If a renter challenges an eviction in court, the requirementthat evictions may only be executed
property owner, with few exceptions,need only for enumerated reasons. These just causes in
demonstrate that proper notice has been given, clude, but are not limited to: failure to pay rent,
the notice has expired, and the tenant is still on breach of a legal lease clause, use of the pre
the premises.
"Eviction can
become a
mises for an illegal purpose,nuisance behavior,
unauthorized subletting and occupancy by the
defacto
For a tenant facing eviction, the consequences owner or an owner's relative. The goal of the
are enormous.In a tight housing market,the task ordinance is to provide owners with the ability
offinding another rmit in a brief period oftime to remove tenants when they have legitimate
is often insurmountable.To compound the prob reasons for doing so. At the same time, renters
sentence to
homelessness
lem,most landlords wiU automatically refuse to are offered some minimal level of security in
rent an apartment to anyone who has recently their apartmentifthey pay the rent promptly and
been evicted. Therefore, eviction can become a abide by all the stipulated rules.
de facto sentence to homelessneSs or even leav
ing the region.
Evaluation
However,there is another consequence to evic
tions that impacts our eritire community. Since
Public Costs
property owners are not required to reveal rea
Just cause eviction ordinances impose adminis
sons for evictions, it is difBcult to prove what trative costs onlocal government. For example,
their true motives may be. A landlord may even owners must be informed of the provisions of
evict a low-income tenant in order to raise the the measure. Enforcement ofthe measure is ul
rent.As previously noted,this rationale for evic timately the responsibility of the courts. How
tion is increasingly likely in the wake of state ever,to the extent the measure is clearly drafted,
law requiring the rent "decontrol" of units that it can discourage violations.
have been voluntarily vacated. Though San
Jose's rent control ordinance specifies that rent
* These include Berkeley, Beverly Hills, East Palo Alto, Hayward, Los
Angeles, San Francisco, Santa Monica, and West Hoiiywood..
Existing
Housing Options
WORKING PARTNERSHIPS I
oreven
leaving the
region."
EVE
Y O N E'S
VALLEY
#
cates large numbers of families experiencing
Private Costs
Although Igmdlords often claim they will forfeit serious hardship.
their ability to evict renters, in truth they will
retain their right to issue evictions for any rea In comparison,San Francisco, which has enacted
son that imposes costs on the property. There a just cause eviction ordinance, reported 2,761
fore,private costs must be considered to be neg evictions in 1999-2000.Adjusted for population
ligible.
^
differences, that would have produced 6,275
evictions in Santa Clara County,a figure almost
Scale
halfthe current number.
The following cities in Santa Clara County have
large numbers of apartment renters:^'*
Longevity of Benefits
Just cause measures are established by local or
San Jose
169,400
dinance. Unless the ordinance has a sunset
Palo AJto
14,544
Mountain View
34,508
clause,it will remain in place unless overturned
by a decision ofthe city council.
Sunnyvale
51,432
Santa Clara
38,606
Benefit to ELI and VLI Residents
Total
308,490
Just cause ordinances provide the same protec
tions to all renters covered by the measure, re
Ifjust cause eviction measures were adopted by gardless oftheir income level. However,the ef
aU of these cities, then 308,490 tenants would fects of these measures are particularly benefi
achieve greater levels ofeconomic security.
cial to ELI and VLI families who generally have
fewer housing altematives.
Attempts to calculate the number of renters ac
tually subject to eviction each year, and hence Feasibility
the number immediately likely to benefit from As noted, just cause ordinances have been
these ordinances, is hampered by inadequate adopted in a dozen jurisdictions in the state, in
record keeping on this subject. The Santa Clara cluding four in the Bay Area, No obstacles to
County Superior Courtreports that between 250
^and 350 unlawful detainer actions are filed each
month.Interviews with Legal Aid Society attor
neys in San Jose suggest that between 10 per
cent and 25 percent of30 day notices to vacate
result in unlawful detainer filings. In that light,
it is estimated that anywhere from 12,000 to
42,000 households experience eviction each
year. In light ofthe region's small inventory of
vacant apartments, even the lower figure indi
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Existing
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their enactment have been identified.
Meeting the Need for Affordable Housing
Few problems in America are as costly as the Ourreview ofthe available options suggests that
need to develop affordable housing; but almost a successful strategy to develop affordable hous
none are more expensive to ignore. As this re
port described,the housing crisis in Silicon Val
ing in Silicon Valley must include the following
elements:
ley grew from a series of policy choices during
an era where the San Jose area was transformed
from a quiet camery town to the center of the
new,global economy.
Our challenge as a community isn't to find any
one solution to the housing crisis. There isn't one.
"The two most
Creating New Housing
•Implementing Inclusionary Zoning
•Increasmg the Percentage of RDA Tax
the new affordable housing we need.
ofthe crisis
we face:
• Allocated to Affordable Housing
• Creatmg an Affordable Housing
Instead,it is to identify the components ofa so
SupLriund
lution: options that enable Silicon Valley to be
gin to answer the two most pressing aspects of Protecting Existing Housing
the crisis we face: maintaining the viability of
• Preservation ofHUD Financed
the affordable housing we have, while creating
pressing aspects
Affordable Housum
maintaining the
viability ofthe
affordable
housingwe
have,
while creating
• Enacting Rent Controls m Urban
L ommunii les
Clearly,some problertis are beyond the scope of
actioti by our commumty alone. For example,
state fiscal policies that discourage cities from
the new
affordable
• Enactmg a Just Cause E\ iction
Ordinance and Estabh^liimr a
Rent ReliefTask Force for San Jose
promoting housing developmentin favor ofstrip
malls can only be addressed by lawmakers in
Sacramento. However, there is much that our
commumty can do ~ and should do ~ to pre
serve and expand affordable housing for Sili
con Valley's families.
WORKING PARTNERSHIPS I
housing we
need."
ii
t :<<
Enocting
Enacting a Jyst Cause
Rent Controls
in Urban
Communities
Evlctioii Ordinance and
Though options for expanding the pool of af
fordable housing clearly exist,the current struc
tural imbalance between supply and demand of
housing continues to make spiraling rental costs
inevitable.Through the enactment ofreasonable
rent controls,includingjust cause evictipn guar
antees,rent increases can be limited to thosejus
tified by cost increases and a fair rate ofreturn
to owners. As previously noted, rent controls
would protect a total of 58,500 households if
Establlsiiing a Rent Relief
Task Force in San Jose
Under state law, San Jose is prohibited from
extending rent control to additional new hous
ing units. However, the city can still take sig
nificant steps to increase the security oftenants,
reduce the hardship associated with escalating
rents, maintain housing quality, and discourage
excessive rent increases.
By enacting a just cause eviction measure, San
Jose can prevent evictions in rentcontrolled units
applied to rental units in the major urban cities for the purpose ofincreasing rents,an action that
lacking ordinances: Palo Alto, Moimtain View, is already prohibited by the city's rent control
Santa Clara and Sunnyvale. Since the number law, but which is largely unenforceable. Such a
ofadditional rental units likely to be builtin these measure would also extend protection to renters
cities is small, the potential loss of new units in units that are exempt from rent control.
resulting from the imposition of controls must
be considered minimal.
In addition, San Jose can establish a rent relief
task force with the mission ofcrafting strategies
To reduce the extent to which these measures to improve the economic conditions ofthe city's
produce inconvenience or costs to property own
ers, the cities noted should take pains to involve
both tenants and owners represented to assist in
all aspects ofdesigning fair rent control andjust
include representation from both owners and
tenant advocates. Tenant protection measures
cause eviction policies.
are only effective to the degree that renters are
tenants despite the restrictions of state law. As
in the case of other cities, the task force should
cognizant of them. Therefore, a primary focus
ofthe task force could be to determine ways that
the protections under San Jose's current rent
control law can be more firmly guaranteed and
expanded. For example, the city could initiate
widespread education programs to inform rent
ers of their right to contest high rent increases.
Meeting the
Need for Housing
WORKING PARTNERSHIPS I
protection
Also, the city could aggressively enforce the
currentprovisions ofthe ordinance,particularly
the prohibition against rent increases on units
from which the prior tenant had been evicted. A
measures are
full review of the current ordinance is also by San Jose's rent control measure, scant effort
only effective
needed to determine the extent to which the level has been made in the past to guarantee its en
"Tenant
to the degree
renters are
cognizant of
them."
As noted earlier, tenant protection measures are
only efiective to the degree renters are cogni
zant ofthem. For example, though resideirts of
HUD projects built prior to 1979 are protected
ofrent increases permitted under its provisions forcement.For this reason,an educational com
should be adjusted downward. Other possible ponent must be incorporated into any renters'
strategies to be evaluated might include man rights measures enacted locally. In this regard,
dating code enforcement inspections when rent Santa Clara County officials could play an ef
increases grow beyond a predetermined level, fective role in developing a joint effort among
or assisting tenants to pay the high initial costs San Jose and other mrmicipalities that have ap
of renting an apartment (an amount that often proved similar measures.
exceeds $5,000).
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Meeting the
Need for Housing
EVERYONE'S
VALLEY
Protecting Existing Housing
CreGliiigAn
Preservation of
'HUD Financed
Affordable Housing
■ Superfund
Affordable Housing
As described earlier, financing an affordable In order to protect the thousands oflow income
housing initiative on a scale necessary to ease units in apartment complexes that may be con
"Affordable
housing will
the Silicon Valley's housing crisis would require
what would amount to an affordable housing
"superfund" of$1.2 billion. Sources for financ
ing 50 percent of this fund have already been
verted to market rates, the city should investi
gate carefully all proposed conversions to de
termine if any prior subsidy or land use deci
sion had been premised on a commitment of
identified: developer contributions would pro longer term affordability. In addition, the city
only be recog
vide approximately $200 million; RDA funds could make clear that all of such units con
from all cities with agencies could offer an ad structed after 1979 wiU be immediately subject
nized as a nec
ditional $200 million; while tax credits could to the San Jose rent ordinance as soon as the
essary invest
contribute another $200 million. The source for contract with HUD has been terminated.
ment if public
the other half of the fund,$600 million, would
officials and
be provided by temporary sales tax increases and
other opinion
general obligation bonds.
leaders begin to
As noted earlier,San Jose and area residents have
address it as
one."
demonstrated a clear willingness to provide sup
port for necessary public investments. However,
it is also evidentthat affordable housing will only
be recognized as a necessary investment ifpub
lic officials and other opinion leaders begin to
address it as one.
WORKING PARTNER!>H1PS USA
Policy Briefs:Sllicon Valley Equity Series
Meeting the
Need for Housing
42
6. City's Monitoring Plan
ANNUAL ACTION PLAN
Federal Sources
San Jose is an "entitlement" city and receives federal funds from the following programs
• Community Development Block Grant Program(CDBG)
• HOME Livestment Partnership Program(HOME)
• Housing Opportunities for People with AIDS Program(HOPWA)
• Emergency Shelter Grant Program(ESGP)
The following describes the proposed uses of federal funds for FY 2001:
HOPWA FUNDS - $723,000 will be distributed to two housing and service providers with a
reserve of 3% for operating costs and administration. Allocations will be $350,655 to the AIDS
Resources,Information and Services(ARIS) program, and $350,655 to Health Connections Aids
Services,formerly known as the Visiting Nurse Association's AIDS project.
HOME PROGRAM FUNDS - A total of $4317,000 will be committed to project sponsors for
property acquisition in connection with new construction of rental units for EUATJ households
and other special needs populations, as well as for homeownership programs. Of this amount,
fifteen percent (or $647,550) will be set-aside for Community Housing Development
Organizations (CHDOs). An additional five percent may be used to support operating expenses
of CHDOs working on a housing development.
Ten percent ($431,700) will be for
administrative costs of the Participating Jurisdiction.
CDBG ~ Total funding of $15,996,000 will be available in FYOl/02 consisting Of $12,996,000
from the City's "2000 Entitlement grant, $1,500,000 in projected 2000 program income, and
$1,500,000 in prior year funds. San Jose will establish a reserve of $100,000 for a contingency
reserve for cost overruns and/or later programming. Fifteen percent(15%) of entitlement funds
and $225,000 in prior year funds will be targeted to human service and housing projects. Eightyfive percent (85%) of entitlement funds, all 2000 program income and the remaining available
funds will be allocated for conununity development improvements including housing
rehabilitation, fair housing, capital improvements, code enforcement and small business
assistance.
EMERGENCY SHELTER GRANT (ESG) FUNDS - A total of $443,000 is available. Of
this amount, 70% will be allocated for shelter operating costs ($310,100), and 30% will be
allocated for support services ($132,900). Up to 20% of the funds will be set-aside for the
County's Cold Weather Shelter Program. Remaining funds will be made available to existing
shelters, day care centers, and homeless service providers.
The federal government provides additional funds for both interim/transitional and more
permanent housing facilities, supportive services, and prevention programs for the homeless
through the ESG. Various nonprofit service providers in the City also receive ESG funds directly
from the State and County.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
6
Other federal funds for the homeless include: •
Federal Emergency Management Agency(FEMA)
Supplemental Assistance for Facilities to Assist the Homeless(SAFAH)
Transitional Housing
Permanent Housing for the Handicapped Homeless
Section 811 Program funds - Supportive Housing for Persons with Disabilities (formerly
part of the Section 202 Program for the Elderly and Handicapped)
The Santa Clara County Housing Authority (which administers the City of San Jose Housing
Authority's programs by legal agreement) also receives federal funds, part of which are targeted
to residents of San Jose needing assistance. These programs include:
• Certificate and Voucher rental assistance programs (Section 8)- the Housing Authority, in
collaboration with the Homeless and Family Self-Sufficiency consortia, works to provide
supportive services for participants by acting as the local conduit for Section 8 funding.
• Shelter Plus Care rental assistance program for homeless persons with disabilities,
particularly mental illness, chronic alcohol and/or drug addition, and AIDS
• Family Unification and Family Self-Sufficiency Programs - two supportive housing
programs.
The Santa Clara County Housing Authority further plays a direct role in developing affordable
housing units. Acting as a nonprofit housing developer, the Housing Authority will continue to
apply for funds from the City and a spectrum of State,federal, and private sources for its various
development projects.
State and Local Sources
California State Redevelopment Law requires that where there are local redevelopment areas, the
property tax revenues generated by increases in assessed value within these areas after the
adoption of the redevelopment plans be allocated to the redevelopment agency to carry out its
redevelopment programs. State law further requires that at least 20% of these "tax increments"
be set aside for the development, maintenance and preservation of housing affordable to low- and
moderate-income households. A local jurisdiction need not limit the use of the funds to
redevelopment areas only, but may use the "20% funds" more broadly within its entire
jurisdictional boundaries, provided that the assistance is of benefit to redevelopment areas. The
City of San Jose allocates its 20% Housing Funds ~ as well as the housing rehabilitation portion
of its CDBG funds ~ for affordable housing development throughout the City according to fiveyear objectives in which 85% of the dollars are targeted to affordable housing for F.TJ, VLI and
LJ households, and 15% for housing affordable to MOD households.
In FY 2001-2002, the City will receive approximately $26 million doUars in 20% tax
increment funds, as well as additional 20% Housing Funds in the form of loan repayments and
interest, and supplemental agency funding in the form of bond proceeds. The amount of tax
increment financing is projected to increase steadily over the next five years. In order to
maximize its 20% Housing Funds, the Department of Housing expects to receive $60 million in
borrowed funds (including long-term bonds and a short term line of credit) during the fiscal
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
7
year 01/02- secured by the future stream of tax increment — for additional affordable housing
development. Federal Matching requirements will be met with 20% Housing Funds and, to a
lesser extent, through locally imposed exemptions from construction-related taxes and fees
for ELI/VLI projects. In providing financing for affordable housing development,the City of San
Jose policy is to provide financial assistance in the form of low-interest loans and grants.
Moreover, the City emphasizes gap financing rather than primary financing.
The City further requires that project sponsors leverage City funds with funds from non-City
sources to maximize the investment in affordable housing. As with current projects in the City
pipeline, project sponsors will be expected to leverage City funds with funds from various
programs such as (TCAC),(CDLAC), the California Housing Fmance Agency(CHFA)and
the State Housing and Commimity Development Department (HCD). These include the
Rental Housing Construction Program (RHCP)and the California Housing Rehabilitation
Program for Rental Units(CHRP-R), two programs on which local sponsors heavily depend
for other leveraging.
Private Sources
The City also expects its funds to be leveraged through a variety of private sources,including the
following:
Affordable Housing Program(AHP)of the Federal Home Loan Bank Board;
Community Reinvestment Programs of private lenders;
Other conventional lenders;
Tax-exempt bond proceeds (e.g., 501(c)(3) bonds);
Taxable bond proceeds;
^
Mortgage Credit Certificates; and
• California and federal low-income housing tax credits.
Anticipated Sources of Funds for FYOl/02
The table below indicates the anticipated amount of funding expected to be received from all
sources for the upcoming fiscal year.
At the State level, the City expects to continue receiving, either directly or indirectly (through
sponsors of affordable housing projects or nonprofit service providers), funding for affordable
housing rehabilitation efforts and programs to assist the homeless. Locally, the City expects to
commit its annual share of tax increment funds for new ^fordable housing pirpjects Citywide.
The following table highlights the anticipated amounts of funding for FYOO/01, showing a total
of $231,8 million in expected activity (both locally controlled and outside funding).
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
8
Anticipated Sources ofFundsfor FYOl/02
A.Formula/Entitlement Programs
4,317
HOME
CDBG
12,996
ESG
443
HOPWA
723
Subtotal — Formula Programs
18,479
B. Competitive Programs
Shelter Plus Care
1,200
Moderate Rehab SRO
7,4
■'V
Rental Vouchers
22,279
Rental Certificates
27,514
Public Housing Comp Grant
646
HOPWA Competitive
LIHTC
98.230
Lead-Based Paint Abatement
SAFAH
Supportive Housing
FEMA
RRP (loan repayments)
100
HUD 202
4,523
Mortgage Credit Certificates
Subtotal Competitive Programs
v
i-'vf .riCI
''jy ■ I
->i
CHFA
-i.'"
Tax Increment
24,049
Bond Proceeds (net)
119,983
Tax Increment Loan Repayments
4,038
Interest Income
4,645
Miscellaneous
443
Housing and Homeless Funds
100
177,100
'7;
Conventional Constr. Financing
29,834
Conventional Permanent Financing
29,834
AHP
Owner Eiquity
P
TSv.'
GRAND TOTAL
. . •'tfj -
153;!58
391,234
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
9
ACTIVITIES TO BE UNDERTAKEN
As noted in the Strategic Plan, there are several priority needs which the City of San Jose'intends
to address over the next five years. The first step in accomplishing the overall five-year plan is to
establish objectives for the upcoming fiscal year - 2001/2002. The one-year targets for FYOl/02
are based on a reasonable assessment of the opportunities and constraints the City of San Jose is
likely to experience in the upcoming year. The table below identifies the City's priority needs
and one-year objectives, which'may be measured in terms of units funded or lower- and
moderate-income households assisted' as well as funding estimated to go towards each need.
PERFORMANCE OBJECTIVES FOR FYOl/02
Priority Need
One-Year Objective
UnitsyHHs
vouchers
1400
New Construction
58 '
$6,670,000
187.
$1,870,000
Rehabilitation
255
$4,100,000
Paint Grants
1063
$2,657,500
1,625
$101,562,500
Est.$
Need #3 — Public Housine Assistance. Need #5 Preservation
VLI/Ll Large Renter HHs, including Senior Renters, Disabled Renters,
Homeless, and others with Special Needs
Need #1 ELIA'Ll/LI Housine. Need #8 Disabled.'Need#9 Senior. Homeless
Need
ELI Large Renter HHs, Senior Renters, Disabled Renters, Homeless, and
Others with Special Needs
VLl/Ll Large Renter HHs, Small Renter HHs, Seniors, and Others with Acquisition/Rehab.
Special Needs
VLI/LI Large Renter HHs,Small Renter HHs,Seniors, and Others
with Special Needs
VLPLl Large Renter HHs,Small Renter HHs,Seniors, and Others
'with Special Needs
Need#4 Overcrowdine, Need #6 Substandard Units. Need #7 Geoerauhic New Construction
Distribution
Acquired/Rehabilitation 1872
ELWLl Large Renter HHs including Districts 3 and 5
Need#2 Home Ownershin
New Construction
100
$6,000,000'
MOD Owner HHs including seniors
Purchase Assistance
100
$900,000
Ll/MOD-income teachers
Purchase Assistance
TBD
$4,000,000
Homeless Need
New Construction
75
$2,472,500
Families with children, Domestic Violence
TOTALS
ELI=0-30% of median
VLI = 31-50% of median
LI = 51-60% of median
rental assistance
1400
new construcdon
1,858
acq/rehab
187
rehabilitadon
255
paint grants
first time homebuyers
100
ELI units
58
TOTAL
4,921
1,063
MOD = 61-100% of median
$9,372,500.00
'it should be noted, however,that the City's performance In meeting the targets should be assessed at the completion
of the FIve-Year Strategy, since the complexities of financing affordable housing development mean that. In any given
year, the specific targets shown may not be met.
^ 187 acquisition/rehabilitated units address needs#l,#4,#6,#7,#8,#9
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
10
GEOGRAPHIC DISTRIBUTION
i
New Construction ~ The City's successful dispersion policy has ensured that areas of the City
with high concentrations of lower-income households are not further impacted by the
construction of new housing affordable to lower-income households. While new affordable units
are being built in impacted areas, the emphasis is to build the majority of affordable units
elsewhere in the City. Below is a table of the new construction projects for FY 2000-2001,
speci^ng the Council Districts in which the project is to be built:
2001-2002 Completions
Project
District
Type
Fund Res.
Projection
Midtown Townhomes
6
For-Sale
93-94
31
Siena Court
3
For-Sale
94-95
15
Italian Garden Family
7
97-98
146
Helzer Courts
7
98-99
153
OUone-Chynoweth
9
7
Family
Family
Family
Senior ,
Piedmont & Sierra
4
Senior
98-99
95
Vista Park Senior n
7
Senior
97-98
82
Vista Park Senior I
98-99*
192
97-98
82 ^
715
2001-2002 TOTALS
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
11
Completion
To be completed 5/01
completed 11/00
To be completed 6/01
completed 3/01
To be completed 8/00
Completed 6/00
To be completed 3/01
Completed 11/00
HOMELESS AND OTHER SPECIAL NEEDS
In addition to the production objectives to meet the homeless needs noted in the Strategic Plan,
the following homeless/special needs activities are anticipated to be undertaken:
HOPWA Funds
The City works directly with the Santa Clara County HTV Planning Council and the other
entitlement jurisdictions in Santa Clara County to determine the appropriate allocation offunding
according to need. The $723,000 in HOPWA funds are proposed to be distributed among the
following housing and service providers, with a reserve of 3% for operating costs and
administration ($21,100):
$350,655 to AIDS Resources, Information and Services (ARIS) of Santa Clara County, which
provides HIV/AIDS prevention and support services cOuntywide. ARIS will provide
low-cost housing for people disabled by HIV who. are homeless or at risk of
homelessness,food and nutritional programs, practical home support, and one-to-one and
group efforts.
$350,655 to Health Connections Aids Servicesj formerly known as Visiting Nurse Association's
AIDS project, which provides assistance to persons with HTV/AIDS in accessing private
and public benefit/entitlement programs as well as housing subsidies and support services
to obtain long-term housing; VNA provides individual counseling, case ihanagement and
psychosocial assessments to assure stable housing as well as short term emergency
assistance with rent and utility expenses.
Emergency Shelter Grant Funds
Of the $443,000 in ESG funds awarded to the City for the upcoming fiscal year,the funds will be
allocated as they have been for the past four years: 70% for shelter operating costs ($310,100)
and 30% for support services ($132,900). A committee comprised of staff from the Department
of Housing, the Department of Parks, the City Attorney's Office, the Mayor's Office, the County
of Santa Clara's Homeless Coordinator, the Santa Clara County Office of Human Relations, and
a homeless or previously homeless person, reviewed the proposals for funding and recommended
awards. The program selection priorities were as follows: •
1. Up to 20% of the funds will be set-aside for the County's Cold Weather Shelter Program at
the Emergency Housing Consortium Reception Center.
2. Remaining funds will be available to existing shelters, day care centers, and service providers
having extraordinary needs for assistance in paying utilities, insurance, rent, etc. Emphasis
will be given to those agencies that attempt to coordinate their services with other shelter and
service providers.
The committee's recommendations reflect a commitment to ensuring that agencies that provide
actual shelter will receive priority for funding, given that the need is great. Additionally, at the
recommendation of the committee, the Housing Department will be establishing more stringent
standards for reporting reasonable and measurable outcomes to ensure that these limited fiinds
will continue to be allocated to those agencies that demonstrate exceptional performance.
t;
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
12
The following table depicts the recommended allocations for FYOl/02: To-be-updated
Emergency
Housing for the Cold Weather Shelter Program to provide for $85,000
Consortium
$66,750
transportation, meals, referrals and services
Sacred Heart Community Center for rent^ and motel assistance to families who are $75,000
$58,250
homeless or are at-rlsk of becoming homeless
Unity Care Group
to provide for staff and rent costs
$25,000
0^
Montgomery Street
for maintenance and operation expenses of the
$60,000
$45,000
for maintenance and operation expenses of the Da.y $40,000
$29,750
shelter
Georgia Travis Day Center
Center
for maintenance and operation expenses of the $35,000
Commercial Street
$25,500
shelter
Next
Door: Solutions
Domestic Violence
Homeless Care Force
to to provide food for the clients and to pay for food, $45,600
shelter maintenance and utilities
$35,253
to provide food, general expenses related to food $64,988
operations, and clothing wd personal hygiene
$34,000
items to homeless street people
Concern for the Poor
for maintenance and operation expenses of the $56,820
$48,297
Family Shelter
Community
Technology to pay for ongoing costs associated with Project $38,000
S.H.A.R.E., the shelter hotline, and other
Alliance
$27,200
programs for the homeless
for maintenance and operation expenses of the $30,000
Bill Wilson
$20,000
shelter
St. Vincent de Paul
for rental and motel assistance to families vvho are $30,000
$17,000
homeless or are at-risk of becoming homeless
Loaves and Fishes
to provide food to the homeless
$12,000
02
Unity Care Group
for transitional.shelter for six to ten youths
$25,000
03
Unity Care Group
for a supplemental program that provides safe and $80,520
04
confidential shelter for battered women and their
children
Tending The Flock
to provide food and food vouchers
Volunteers of America
to provide, food, lodging and case management $44,000
$2,000
05
$13,000
services
City ofSan Josd
to provide emergency services to the homeless such $25,000
as bus passes and emergency hotel vouchers
$25,000
11445,000., ■
7
Unity Care was notfunded because their proposal did not meet the minimum criteria with respect to providing shelter.
Loaves and Hshes was not funded because they are a new agency seeking funding and the Committee determined that, since total ESG
funding
was the same as last year,it was unable to fiind new activities.
Unity Care was notfunded because this project is not for emergency housing.
^ Asian Ameiican was not funded because they are a new agency seeking fimding and the Committee determined that it was unable to fund
new activities.
^ Tending The Hock's application was incomplete.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
13
The amount of matching funds provided by the City for the ESG progr^ has; in the past, at least
equaled and usually exceeded the amount of the grant from the federal government. The City's
match may not include amounts that have been counted as an ESG match previously, hi gener^,
the City matches the ESG funds with funds from the City's Housing and Homeless Fund.
Homeless Prevention Activities
The following additional actions to address the housing needs of the homeless and special needs
are proposed for the coming year:
1. The City has a Rental Assistance Program, which offers a one-time monetary assistance for
people who are at-risk of becoming homeless. This program has been beneficial to several
thousand individuals and families on the Verge of becoming evicted. The City will continue to
support tWs program, and increase the funding if needed..
2. The City offers move-in costs to individuals and families who are moving to permanent housing.
3. The Welfare- to-Work program provides tenant-based Section 8 rental assistance to help eligible
families make the transition from welfare to work. This program hais many steps that a voucher
recipient has to follow: self-identification for the welf^e to work voucher program. Initial
screening orientation for the program, verification of eligibility, workshops,,counseling, and
housing search activities, and employment plans for prospective program participants. Housing
screening committee, sign the Welfare-to-Work Housing Contract, apply for;housing assistance,
housing search, and finally sign-up for the Family Self-Sufficiency Program. These steps are
intended to prepare people to enter back into the workforce and become self-sufficient.
Other Programs to help in the transition to permanent housing
The City will continue to fund shelters that provide counseling and other case management
assistance to prepare individuals and families for the transition from emergency and transitional
housing to permanent housing.
Several of the shelters in San Jose provide case management, and preparation courses such as
resume writing, skills training, financial planning, parenting, and many others. These courses
provide a foundation on which people can begin a new life. The City funds many of these
shelters, and will continue supporting them and encouraging them to be innovative and
reinventive in the development of their courses;
City ofSan Jose
Consolidated Plan
One-Year Action Plan,2001
14
OTHER ACTIVITIES
Based on the findings of the two studies conducted on the housing needs of persons with
disabilities and seniors, the following additional activities are proposed:
Seniors
1.
Investigate opportunities for market rate congregate or life care housing through zoning
and planning policies. Department ofPlanning, Building and Code Enforcement
2.
Determine whether existing density bonus policies could be made more effective in
encouraging the development of market rate senior housing. Department of Planning,
Building and Code Enforcement
3.
Continue to collaborate with Project Match on finding a suitable site to house homeless
seniors in permanent housing. Department ofHousing
Disabled
1.
Continue to .seek projects that provide group housing for persons with disabilities to
maximize options that provide residents with their own bedrooms. Department of
Housing
2. ■
The City will work with other agencies to develop more outreach services for the
hardest-to-serve homeless population. Department ofHousing
3.
The City will continue to work with Housing Choices Coalition to meet their needs in
helping persons with disabilities. Department ofHousing
4.
The City will finance the rehabilitation or assist in obtaining financing for Casa Feliz to
provide housing for persons with mental disabilities. Department ofHousing
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
15
OTHER ACTIONS
J
Public Policies
In addition to its production objectives, the City is strongly committed to improving the
affordable housing delivery system. Some policy actions in this year's plan include efforts begun
last year which require further analysis, as follows (responsible parties shown in italics):
1.
Continue implementation of a community education effort for affordable housing.
Department ofHousing
2.
Complete a study of the feasibility of creating a housing trust fund that would provide
an ongoing, dedicated source of revenue for affordable housing efforts, such as a
General Obligation(GO)Bond. Department ofHousing
Institutional Structure
In the upcoming year, the following actions will be undertaken to improve the delivery system
and eliminate identified gaps in the institutional structure:
1.
Continue to apply for federal and State funds to maintain and increase funding for
affordable housing projects. Department ofHousing
3.
.
Continue to seek solutions to address federal regulatory barriers to the production and
rehabilitation of affordable housing (e.g., cost-prohibitive relocation benefits required
by federal regulations). Department ofHousing, Office ofIntergovernmental Relations,
City Council
4.
Continue to prepare Neighborhood Improvement Plans as part of the Strong
Neighborhood Initiative (SNI). Areas include 13*^ Street, Five Wounds/Brookwood
Terrace, East Valley/680 Coiiununities, Mayfare, Spartan/Keyes, Burbank/Del Monte,
Tully/Senter, Winchester, Whaley, Josepha/Auzerais, Gardner/Aflanta. The plans will
seek strategies to renovate existing homes and to provide opportunities to identify infill
sites.
Continue to update existing Neighborhood Revitalization Plans. As part of the process,
staff will continue to look for new housing opportunity sites. Areas include Santee,
University, Washington, Rockspring, and Edenvale/Great Gala. Department of
Planning, Building and' Code Enforcement, Department of Parks, Recreation and
Neighborhood Services, Department of Housing, Police Department, and other City
departments,
5.
Continue coordination with and assistance to the San Jose Neighborhood and Housing
Services. Department ofHousing
6.
Advocate changes in federal laws to improve San Jose's position in applying for scarce
public dollars. Department of Housing, Office of Intergovernmental Relations, City
Council
City of Sati Jos6
Consolidated Plan
One-Year Action Plan,2001
16
7.
Continue implementation of the Alviso Community Plan to address land use, economic
developnaent, affordable housing, and other issues to enhance and protect the existing
character of the area, including the existing affordable housing stock. Department of
Planning, Building and Code Enforcement, Department of Housing, Department of
Parks, Recreation and Neighborhood Services, and other City Departments
8.
Continue to Implement a first-time homebuyer program for teachers. Department of
Housing
9.
Develop processes and procedures to maximize the delivery of housing services and to
improve coordination between various City Departments as part of the City Council's
direction to increase production by 50%. As part of this, continue implementation of a
Housing Action Team (HAT), made up of staff from various Departments, to facilitate
the development of affordable housing.
Department of Housing, Department of
Planning, Building and Code Enforcement, City Attorney's Office, Department of
Parks, Recreation and Neighborhood Services, Department of Public Works, Fire
Department, and other City Departments
10.
Implement an aggressive program to acquire suitable surplus sites to help meet the
increased production goals in the future. As part of this, the City will m^e it a priority
to use City surplus land for affordable housing purposes as appropriate. Department of
Housing, Department of Public Works, Department of Planning, Building and Code
Enforcement, City Attorney's Office, Department of Parks, Recreation and „
Neighborhood Services, and other City Departments
11.
Continue to identify vacant and underutilized parcels, particularly along TransitOriented Development Corridors, suitable for higher density and/or mixed-use
development as part of the Housing Opportunity Study. Department of Planning,
Building and Code Enforcement
12.
Expand Rehabilitation Program in Strong Neighborhoods. Department of Housing,
Redevelopment Agency
13.
Increase Predevelopment funding for nonprofit developers. Department of Housing,
Budget Department
14.
Review Inclusionary Zoning and possible development of ordinance. Department of
Housing, Department ofPlanning, Building and Code Enforcement
15.
Work with San Jose State University on joint projects for housing. Department of
Housing, Redevelopment Agency
16.
Reanalyze assumption that housing is not paying its fair share of taxes, and analyze
feasibility of using industrial sites for affordable housing development. Department of
Planning, Building and Code Enforcement
17.
Explore the use of air rights above publicly owned properties. Department ofPlanning,
Building and Code Enforcement
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
n
Fair Housing
1. .
Complete an Analysis of Impediments to Fair Housing, including recommendations for
further action. Department of Housing, Department of Parks, Recreation and
Neighborhood Services,fair housing service providers, and others involved in this issue
2.
Complete a Countywide Fair Housing Needs Assessment. Department of Housing,
other entitlementjurisdictions in the County ofSanta Clara
Lead-Based Paint Strategy
The Department of Housing has updated its policies and procedures to conform to the Final HUD
Regulation on Lead-Based Paint Hazards that was supposed to become effective September 15, 2000,
but was extended to March 15,2001. The new regulation is contained in 24 CFR Part 35.
The new regulations require that any HUD-funded project exceeding $5,000 must include measures to
make the entire dwelling "lead-based paint safe." This requirement significantly affects the costs,
timeframes, and processes in which rehabilitation projects are administered by the Housing Department.
All residential buildings constructed before 1978 may contain lead-based paint. The neighborhoods
identified in the "Strong Neighborhoods Initiative" target areas are predominately pre-1950 indicating an
extremely high likelihood of lead-based paint contamination. Any work where lead-based paint (or
presumed lead-based paint) will be disturbed falls under the new regulations. The amount of Federal
funding per project also dictates at what level the problem(s) are to be addressed ($5,000 or less, over
$5,000 but less than $25,000, and over $25,000). Again the age and condition of the dwellings within
the SNI neighborhoods would indicate that the majority of rehabilitation projects will exceed $25,000,
thus falling under HUD's most stringent category for lead based paint.
Li support of the" govemment's goal of eliminating lead-based paint hazards in housing, the Housing
Rehabilitation Program has been testing all pre-1978 projects for lead-based paint, whether or not federal
funds are used. Through this testing (and remediation), San Jose has begun to develop an accurate
database of dwellings with lead-based paint hazards'and data which will help staff,determine the scope
of the problem on a city-wide basis. For the fiscal year ending June 2001, San Jose will have spent
approximately $125,000 in its efforts to identify and eliminate hazards associated with lead-based paint
in residential structures.
Public Housing
The Housing Authority of the County of Santa Clara, utiUzing federal HUD funds allocated for
the County of Santa Clara, built and manages 4 conventional (public housing) buildings, two of
which are for Seniors and persons with disabilities, and the other two are family units. The four
sites comprise of 234 public housing units, for which the Housing Authority provides on-site
management, maintenance and landscaping services. The public housing wait Ust has over 5000
names on it.
Section 8
City of San Jose
Consolidated Plan
One-Year ActionPlan,2001
18
The Housing Authority, in partnership with the County Social Service Agency, received 1066
vouchers, targeted to people on the Section 8 wait list who are currently receiving TANF
(Temporary Aid to Families in Need), qualified by income to receive TANF, or have received
TANF services in.the past two years. The program provides case management, workshops,in
money management, landlord/tenant law, and other supportive services. In order to receive and
keep the voucher, a family must be employed or in training to become employed. As of 2/22/01,
968 families had secured housing. It is anticipated that this set aside funding will be fully utilized
by March 15,2001.
The Housing Authority also anticipates on receiving an allocation of.1200 vouchers to be used
throughout the City and County on a first come,first serve basis. The current wait list for Section
8 has 24,975 names on it. Approximately 800 vouchers have been issued for this allocation to
date. An application for 1000 new vouchers was submitted in January, 2001.
The Housing Authority also received 100 vouchers for Main Stream funding, set aside funding
for persons with disabilities. This was the second allocation for this program received by the
Housing Authority. All of these vouchers have been utilized.
The Family Unification Program consists of ah allocation of 250 vouchers intended to be used by
families with an Open welfare case that are in danger of losing their children due to lack of
housing. Approximately 166 of these vouchers are being utilized with the balance to be issued by
June30,2001.
Section 8 project- base funding may be available for landlords who are willing to provide
housing units for families who qualify for vouchers or families who have vouchers, and are
looking for a unit. Information about project-base opportunities vvill be available by June 1,2001.
Federal regulations for the project- base program are being finalized as of February,2001.
Section 8 Homeownership
The tenant may use section 8 Housing Assistance Payments to purchase a home. The Housing
Authority intends to administer a pilot program targeted to the participants of the Family Self
Sufficiency Program. The program will be implemented after July 1,2001.
Affordable Housing
The Housing Authority of the County of Santa Clara recently opened a new complex, Helzer
Courts Apartments (155 Family units) by using a variety of financial resources, including funds
firom the City of San Jose Housing Department. Land has been purchased to build a 125-unit
complex for Senior citizens in SW San Jose. 47 Units of Family housing were purchased and
rehabilitated in central San Jose. The rents are affordable in all complexes. The Housing
Authority has built/ rehabilitated and manages 12 complexes for families, persons with
disabilities and seniors in the City of San Jose. The wait list for Housing Authority affordable
units throughout the County is approximately 41,000 persons or families^
■- /
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
19
PROGRAM - SPECIFIC REQUIREMENTS
CDBG
AVAILABLE FUNDS-FYOl/02
It is expected that total funding in the amount of $15,996,000 will be available in FYOl/02
consisting of $12,996,000 from the City's 2001 Entitlement grant, $1,500,000 in projected 2001
program income, and $1,500,000 in prior year funds.
Projected Use of Community Development Block Grant Funds for the First of Three Years-FY
01-02
/
The following section outlines the City Administration's recommendation submitted to the
CDBG Steering Committee on projects proposed to be implemented with the funds available in
2001-2002.fiscal year. During this one-year period, the City proposes to utilize 99% of these
funds to serve low and moderate-income persons.
In FYOl/02 San Jose proposes to establish a reserve of $100,000 for a contingency reserve for
cost overruns and/or later programming. San Jose proposes to allocate 15% of the entitlement
funds and $225,000 in prior year funds to human service and housing projects administered by
community based organizations. Eighty-five percent 85% of entitlement funds, all 2001 program
inconie and the remaining available funds are proposed to be allocated for community
development improvements including housing rehabilitation, fair housing, capital improvements,
code enforcement and small business assistance. The proposed allocation of available funds by
category is as follows:
(
CONTRACTUAL COMMUNITY SERVICES
PUBLIC SERVICES(14%)
COMMUNITY DEVELOPMENT IMPROVEMENTS
FAIR HOUSING(3%)
PROGRAM ADMINISTRATION AND PLANNING(14%)
HOUSING IMPROVEMENT PROGRAM(21%)
ECONOMIC DEVELOPMENT(4%)
CODE ENFORCEMENT AND INTERIM ASSISTANCE(16%)
Pi^SICALIMPROVEMENT PROJECTS(27%)
RESERVE (1%)
CONTRACTUAL COMMUNITY SERVICES fCCSJ CATEGORY
Within this category,$1,949,000 in Entitlement funds and $225,000 in prior year funding is
allocated to public service projects. All projects serve low and moderate-income persons on a
citywide basis. Programs marked by an asterisk are also receiving funding from the City's
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
20
General Fund.
PUBLIC SERVICES(15% of Available Funds)
ALLIANCE FOR COMMUNTTY CARE
Community Support Recreation ($21,000)
Projects provide recreational and support activities to adult residents of San Jose with
persistent mental illnesses. Services include support groups, educational presentations,
recreation activities, self-help activities, outreach and coordination with mental health
treatment staff.
BILL WILSON MARRIAGE & FAMILY COUNSELING CENTER
Runaway and Honieless Youth Shelter($40,000)
Project provides a range of services for runaway and homeless youth and their
families including food, emergency shelter, individual and faimly counseling,
recreation activities, medical care and education services.
CATHOUC CHARITIES OF SAN JOSE
Shared Housing ($80.000)
Project involves providing information and referrals to San Jose residents about affordable housing
opportunities through home sharing.
YES' Young Women's Empowerment Project($66,743)
The project fosters the healthy development of young women to prevent teen
pregnancy and dating violence. The project uses a multi-level approach. Which
includes support groups, peer education/mentorship, career/educational
development workshops, mother daughter-activities and individuals to carry out
project activities.
HOUSING AUTHORITY OF THE CITY OF SAN JOSE
Family Self-Sufficiencv ($30.089)
Project assists families in subsidizing housing to achieve economic self-sufficiency by
linking them to training and employment retention support services.
COMMUNITY TECHNOLOGY ALLIANCE
Project Share($21.069)
The project provides communication tools as supportive services to homeless and at-risk
individuals seeking shelter, permanent housing,employment and community voicemail.
CONCERN FOR THE POOR
Case Management($29.400)
Project provides case management to homeless families with children. The project's goal
is to assist families in removing barriers to self-sufficiency. . Services includejob
counseling,referrals to educational programs basic computer skills, help with money
management and general counseling as needed.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
21
CROSS-CULTURAL COMMUNITY SERVICES CENTER
Youth Employment Services and Placement($43,000)
Project provides limited English proficient youth ages 16-21, with 12 weeks of
employment readiness skills and computer training in three non-repetitive cycles a year.
r»n
A r. A tt
i u & Communitv SupportCOMMUNITY,
ADVOCACY,AND REFERRAL AGENCY
UCARA
Health
Services
07^^
The project provides health, benefit and daily living services to deaf, deafened, deaf-blind
and hard-of-hearing persons. Clients receive services in ASL or the communication
mode most usable by them. .
EMERGENCY HOUSING Consortium(EHC) 5
H.O.M.E.S.($61,000)
The project provides extensive housing location assistance, life skills training,
enaployment services and informational resources to help homeless San Jose residents
gain and maintain permanent housing and stability. .
ETHlpPlAN COMMUNITY SERVICES
Ethiopian Communitv Center
oai)
Project provides translation/interpretation, outreach and counseling services to
low/moderate individuals/families residing in the City of San Jose to become selfsufficient.
nUPlNO-AMERlCAN SENIOR OPPORTUNITY DEVELOPMENT COUNCIL,
Northside Communitv Gp.ntp.r
Project provides services catered toward helping seniors overcome language barriers,
obtain Veterans Benefits, entitlements,income maintenance and others.
FRIENDS OUTSIDE IN SANTA CLARA COUNTY
School Advocate Proiect($30,000)
The project provides a variety of services to youth between the ages of7 and 14 with AD/HD
or other learmng disabilities, which are causing problems at school and home. The
project also provides services to parents to help them understand and assist with the
challenges their children are experiencing.
INNVISION
Cecil White Cp.ntp.r r$d7 nno)
Project provides homeless people with essential services,employment readiness
training,job search and placement, case management, basic medical care, mental
health referrals, substance abuse assessment, education,counseling and computer
training.
MianStreetlnn ($25,000)
The project provides direct services to homeless and severe mentally ill persons. The
project links these persons to service providers, volunteers and government agencies in
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
22
the community to meet the multiple needs of this population.
Community Inns ($24.000)
Project provides 15 shelter beds at community churches on a rotating basis,three meals
per day, case management and supportive services to homeless people. A caseworker
works with the homeless person to identify, obtain and retain employment in the
community and link them to comprehensive support services.
LEGAL AID SOCIETY OF SANTA CLARA COUNTY
T ^ipal Aid Society Housing Counseling($139,285)
The project provides counseling,legal assistance and landlord seminars to address
housing related problems.
,
'
LIVE OAK ADULT DAY SERVICES
Senior Adult Day Care/Resnite ($29,483)
The project provides a specialized program of Adult Day Care to enrich the quality of life
of disabled seniors by providing them with socialization opportunities to assist in
preventing or delaying institutionalization.
LOAVES AND HSHES FAMILY KITCHEN
Loaves and Fishes Project($20,000)
The project serves no cost hot meals five days a week to low-income persons.
MEXICAN AMERICAN COMMUNTTY SERVICES AGENCY
Casa MACSA Adult Dav Health Services ($30,911)
The project provides comprehensive day care and rehabilitative services for frail and
elderly adults.
MACSA Youth Center Services($$144,900)
The project provides education,recreation, employment development and mental health
services for youth ages 6 to 18.
Youth Opportunities Unlimited($147,000)
The project provides service programs such as academic support, computer literacy, art,
recreation and social development for low/moderate income students.
NEXT DOOR SOLUTIONS TO DOMESTIC VIOLENCE
Shelter Next Door($80,000)
The project provides intensive case management, advocacy, counseling, support groups,
educational workshops, parenting support and legal services for victims of domestic
violence and their children. Children are provided with educational advocacy, support,
counseling and recreational opportunities.
OUTREACH
ESCORT
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
23
Special Needs Transnortatinn ($46,000) .
prqject provides door-to-door transportation to frail seniors and disabled adults.
founds from the projett will be used to subsidized .35 cents of the $2.50 per ride fare
charged.
^
PORTUGUESE ORGANIZATION FOR SOCIAL SERVICES & OPPORTUNITIES
Minority Senior Service Providers Consortiiim ($126,028)
The project will provide wellness and recreational activities, respite senior day
care se^ices,language assisted transportation, escort, social services information
referrals and immigration services to limited English speaking seniors in the City.'
PROJECT MATCH
Senior Citizen Hou.sing Match/Homelessness Preventinn /.1:Q7 nnm
The project "Matches" seniors offering a room in their home (Providers) with
individuals who need a room to.rent(Seekers).
respite,researchfor ALZHEIMER'S DISEASE
Alzheimer's Activity Center($30,000) ^
The project provides therapeutic activities and activities of daily living to extremely low-
and low moderate-income seniors suffering Alzheimer's Disease and related illness. The
therapeutic activities include encouraging physical mobility, enhance and use of cognitive
skills. Additionally, the project provides assistance in the areas of nutrition, personal
hygiene and stability.
.
,1^
m
SACRED HEART COMMUNITY SERVICES
Comprehensive Services Prnjp.rt($25,000)
Project provides emergency food boxes,sack lunches,employment placement,clothing
and information and referral service for low-income persons and families.
SAN JOSE FIRST UNITED METHODIST CHURCH
San Jose First Commimitv ServicRs($19,000)
Project provides outreach programs such as basic human needs, vocational and
employment
development,rental assistance and emergency reUef to homeless and very
low-income families of San Jose.
SANTA CLARA COUNTY ASIAN LAW ALLIANCE
Asian Law Alliannp
nno)
..
The project provides multilingual and culturally sensitive legal counseling and
preventative community education services to low-income residents of San Jose. The
project has two components: legal services and community education.
MEOT^HEALTH ADVOCACY PRJECT OF THE LAW FOUNDATION OF
SILICON
Residential Care Ombudsman ($24,000)
City ofSan Jose
Consolidated Plan
One-Year Action Plan,2001
24
The project assists persons with mental and developmental disabilities in
resolving legal problems in residential care housing and independent living such
as evictions, substandard living conditions, verbal, physical and financial abuse.
SANTA CLARA/SANTA CRUZ COUNTffiS COUNCIL OF CAMP FIRE
Camp Fire Teen Leadership Corp.(TLC)($31,614)
„
The project recruits teenagers from low-income neighborhoods identified as "at risk" of
dropping-out of school and into g^gs and substance abuse and trains them to become
teachers,role models, and mentors for younger chilcten. The project provides the support
system for these persons needed to help them stay in school, stay employed, and access if
necessary to social services needed to help them h^dle personal or family problems.
SANTA CLARA UNIVERSITY
East San Jose Communitv Law Center($27,000)
The project assists low-income people to understand and enforce their legal rights in
employment, immigration, and consumer matters through group workshops, drop-in
Clinic interviews, and individual representation and community education.
SANTA CLARA VALLEY BLIND CENTER
Blind and Visuallv Impaired Client Services Deliverv($27,000)
The project provides social, recreational and educational programs for tlie blind and
visual impaired. The project provides information regarding products for the visually
impaired,financial information,transit information, educational opportunities and
referrals to other social service agencies.
SECOND HARVEST FOOD BANK
Operation Brown Bag($18,000)
The project is a.self-help program that assists very low-income seniors with their food
needs. Through this project seniors receive a bag of groceries each week at various City
locations.
SENIOR ADULT LEGAL ASSISTANCE(SALA)
T.epal Assistance to Elders($88,000)
The project provides free legal services to elderly clients through on-site appointments at
twelve San Jose senior centers.
SERVICES FOR BRAIN IMPAIRED (SBl)
Continuum Of Care($20,000)
The project provides rehabilitative services such as day treatment, assessment, case
management and information/referral to severely, traumatically brain-impaired survivors.
SnJCON VALLEY INDEPENDENT LIVING CENTER(SVILC)
Housing Prnpram for Persons with Disabilities ($10,000)
This project is a housing referral/advocacy/placement service that addresses the special
housing needs of persons with disabilities.
'■
City of San Jos6
Consolidated Plan
One-Year Action Plan, 2001
25
SUPPORT NETWORK FOR BATTERED WOMEN
Services for Battered Women and Children ($40,000)
The project provides a support network for battered women and their children. The
project provides bilingual service, a 24- hour toll free crisis hot line, emergency
shelters, legal advocacy and counseling for women and children.
VIETNAMESE VOLUNTARY FOUNDATION
'
Vietnamese Elderlv Services Senior r!p.ntp.r($60,000)
The project works to enhance the quality of life for elderly adults of Umited
English proficiency. Services include ESL/Citizenship classes, case management,
field trips, recreation activities; health services interpreting and translating
services.
Vietnamese Youth Gang Prevention/Intervention Program ($21,250)
The program consists of SAGE/school-based counseling, mentoring, support
groups and recreational activities,
WOMEN AND THEIR CHILDREN'S HOUSING(WATCH)
WATCH($33,000)
The project provides a safe living environment for victims of domestic violence and a
system^of support services that includes therapeutic interventions, case management,
recreation, mentoring and educational support.
YWCA IN SANTA CLARA VALLEY
YWCA Child Carp. r.1;i
As part of a nine non-profit childcare consortium,the project provides high quality
subsidized childcare services at fifteen sites throughout San Jose. The project also
provides coupeling, assessment of children, short-term intervention, parent workshops
and information and referral services.
COMMUNITY DEVELOPMENT IMPROVEMENTS fCDD CATEGORY
WiAin this category, a total of$11,047,000in 2001-2002 entitlement funds,$1,500,000 in
antidpated 2000 program income,and $1,275,000 in prior year funds is available for housing
rehabilitation,fair housing, capital improvements,code enforcement and small business
assistance programs. All projects serve low and moderate-income persons and are Citvwide
unless noted.
FAIR HOUSING PROTF.CTS(3%)
LEGAL AID SOCIETY OF SANTA CLARA COUNTY
Legal Aid Society Fair Housing PrniRct($150,000)
provide 24 free Fair Housing Seminars at various locations throughout
City of San Jos6
Consolidated Plan ,
One-Ye^ Action Plan,2001
26
SAN JOSE FAIR HOUSING CONSORTIUM
Fair Housing and Enforcement Services($307.274)
The project provides comprehensive fair housing education,investigation an
enforcement services.
PROGRAM AT>MTNTSTRATTnN AND PLANNING(16%)
DEPARTMENT OF PARKS,RECREATION AND NEIGHBORHOOD SERVICES
fDRG Profn-am Development & Monitoring($1,112,273) ,
The project provides program development/evaluation,project
implementation/monitoring and technical support in managing 100 projects per
year.
Strong Neighborhoods Initiative(SND Organizing and.Implementation Team
£$320 227)
The project is a partnership of the City of San Jose,Redevelopment Agency and
the community to build, clean, safe and attractive neighborhoods with strong,
independent and capable neighborhood organizations.
Theraneutic Recreation & Welluess Facilitv Pfp-Dftvelopment Studv ($200,000)
The project consists of initiating a pre-development study to address the need for a
centralized recreation and wellness facility for persons with disabilities. The study will address
site location,facility design and development of-architectural drawings.
DEPARTMENT OF PLANNING,BUILDING & CODE ENFORCEMENT
Environmental Review of CDBG Proposals($72,770)
The project consists of research of all potential environmental impacts for CDBG project,
including fieldwork, analysis and documentation of each project's consistency with
NEPA standards for each impact category.
Neighborhood Revitalizatioh Program ($348,469)
The project has two parts: Neighborhood Revitalization Plan Preparation and
Neighborhood Revitalization Plan Coordination. The Plan Preparation component
consists of preparing several comprehensive community-based revitalization plans in
troubled low/moderate income neighborhoods. The Plan Coordination component
coordinates,implements and monitor existing and future neighborhood revitalization
plans.
DEPARTMENT OF FINANCE
Accounting for CDBG($169,172)
r«-om
The project provides financial administration and record keeping for the CDBG program.
HOUSING IMPROVEMENT PROGRAM(24%)
City of San Josd
Consolidated Plan
One-Year Action Plan,2001
27
ECONOMIC & SOCIAL OPPORTUNTIIES(ESO)
Housing and Energy Services Propram ($600,000)
The project assist low/very low income persons of San Jose by providing services such as
e identification and correction of hazardous and unsafe conditions, providing safety
inspections and testing, performing lead paint hazard screening and education and minor
home repairs.
DEPARTMENT OF HOUSING
Housing Rehabilitation r.1;?.
The project provides low-interest and deferred loans to low-income borrowers and loans
to rental property owners to improve their properties occupied by low - moderate-income
households.
COMBINDED ADDICTS AND PROFESSIONAL SERVICES(CAPS)Vermont House($320,000)
The project involves acquiring two residential structures serving as transitional housing
tor 2o extremely low-and very low-income persons.
ECONOMIC DEVET.OPMF.nt
DEPARTMENT OFPARKS,RECREATION AND NEIGHBORHOOD SERVICES
San Jose Smart Start Familv Child Carp.($218,550)
The project consists of expanding early childhood development/child care spaces
creating new businesses and filling vacant spaces in existing businesses.
OFFICE OF ECONOMIC DEVELOPMENT
Revolving T^an Fund Kxnansioh ($50,000)
The project consists of creating and retainingjobs for San Jose residents,
increasing investment in blighted areas and vacant facilities, developing'
businesses operated by economically disadvantaged residents.
SANTA CLARA UNIVERSITY
Small Business Consulting Group("SBCn")^$'77 nno)
The project consists of expanding support beyond legal services to include
usiness related services to assist low-income persons interested in starting or
developing their own small businesses. Project will provide financial planning
marketing and business strategies to enhance the opportunities for low-income'
entrepreneurs to succeed in achieving economic self-sufficiency.
snjcoN vXlley economic developm^(sved)corporation
Small Business Institute/ Business Assistance Center($263,287)
The project provides pnerd business assistance, technical assistance,loan
packaging and financial assistance to low-income residents starting up businesses
that will create new jobs,
Entrepreneurshin Training Program ($72,528)
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
28
This project will provide training for entrepreneurs who will then create jobs for lowincome persons. Along with entrepreneur training the project will also provide business
plan development and one-on-one business development mentoring.
CODE ENFORCEMENT AND INTERIM ASSISTANCE(18%)
DEPARTMENT OF PLANNING,BUILDING & CODE ENFORCEMENT
Cnmrnnnitv Improvement Program (CIP)($487,535)
The project consists of preserving and improving the quality of existing affordable
housing units in low-income neighborhoods through enhanced code enforcement
inspection services. The project utilized owner and tenant education and neighborhood
beautification projects to improve low-income neighborhoods.
Concentrated Code Enforcement Program(CCEP)($779,626)
The project consists of preventing or eliminating slum and blight conditions in targeted
low/moderate income areas in San JOse. The project uses a systematic proactive
inspection and application of code enforcement code to correct he^th and safety
violations.
Np-iphbnrhood Action Center(NAC)($470,327)
The project consists of providing Code Enforcement services to two Project Crackdown
areas and two Neighborhood Action Centers.
Project Crackdown ($542,293)
The project consists of providing law enforcement services,improving the
physical conditions of neighborhoods through Code Enforcement activities.
Community Organization and education and outreach.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
29
SAN JOSE CONSERVATION CORPS.
Corps Community Pmients r*!;? i ^
This project,consists of improving the appearance of neighborhoods through
hedth and safety activities and clean up activities. Services included in this
project also pertain to fire hazard reduction, repairing fences, disposal offurniture,
re-landscaping, park rehabilitation design and installation ofirrigation system.
PHYSICAL TMPROVEMRNTS(33%)
BOYS & GIRLS CLUBS OF SILICON VALLEY
Eastside Clubhouse Capital Proiect($750,000)
The project involves building a new community ball field and renovating an outdated
5,000 square foot clubhouse.
DEPARTMENT OFPARKS,RECREATION AND NEIGHBORHOOD SERVICESb"'& Bester
Park Site Development t'SO nnn)
The project consists of developing a neighborhood park to serve the Spartan/Kevs
neighborhood.
Anti-Graffiti Program ($442,010)
The project consists of decreasing the presence of graffiti blight in San Jose through
pronapt removal of graffiti from both public and private property with an emphasis on
low-income areas.
Guadalupe-Washinptnn Allev Reconstruction
nnm
The project consists ofimproving the function, appearance and safety of an alley in the
Guadalupe-Washington area. The improvement will consist of redesign and reconstmction of the
Alley,
Roosevelt Roller Hockev Rink Renovatinn r.tipn? nnm
The project consists of renovating an existing roller rink.
DEPARTMENT OFPLANNING,BUILDING & CODE ENFORCEMENT
Walnut Grove Area Site Improvement Proiect TT($820,000)
The project consists of reconstructing two private driveways and parking areas behind
fourplexes in the southern (Dubert Lane) and eastern (Crucerro Drive) portions of the
Walnut Grove area of Santee neighborhood.
DEPARTMENT OFPUBUC WORKS
Mavfair Streetlights Phasp. TTT($200,000)
The project consists of modifying the present lighting system in parts of the Mayfair
Improvement Initiative area.
Proiect Crackdown Strpp.t Lightening($120,000)
^e project consists of modifying the present lighting system in parts of Project
Crackdown areas.
City of San Jos6
. Consolidated Plan
One-Year Action Plan,2001
30
EMERGENCY HOUSING CONSORTIUM
Transitional Housing Rehabilitation Project Phase E($204,000)
The project consists of renovating two buUdings serving as transitional housing units at 1089
North Fifth Street and 282E. Younger Street.
HOUSING FOR INDEPENDENT PEOPLE,INC.(HIP)
Disabled Housing Preservation ($211,920)
The
project consists of preserving 25 units pf affordable housing, by way of
rehabilitation, occupied by low-income persons with disabilities.
MEXICAN AMERICAN COMMUNITY SERVICES AGENCY,INQ.
MAPS A Enrichtnent and Dp-ve1opment Center($495,000)
.. ,
The project consists of rehabiUtating a donated residence and adjacent building for office
space to be used for youth service programs.
SAN JOSE DAY NURSERY
. Nurserv Renovation Project($194,000)
,
The project consists of pre-construction steps to rehabilitate an 84-year old building used
for child development services.
YWCA IN SANTA CLARA VALLEY
Franklin-McKinlev School District Child.Care ($575,830)
The project consists of installing two modular buildings at two school sites in the
Franklin McKinley School District: Robert F.Kennedy and George Shirakawa Sr..
RESERVE(1%)
An operating reserve of $100,000 is proposed.
City of San Jos6
Consolidated Plan
One-Year Action Plan,2001
31
HOME PROGRAM FUNDS
A total of$4,317,000 is available,to be used for a variety of housing-related activities.
New Construction ^ Given the, current and projected shortage of affordable housing, new
construction of affordable housing units is the City's highest priority for housing assistance. The
HOME funds for property acquisition and construction of rental units for
and U households and special needs populations such as single parents, seniors the
HIV/aids and people at risk of homelessness. Participation in the
HOhffi Program will enhance the City's funding sources for new construction, at the same time
providing greater flexibility in determining the use of funds in our overall gap-financine
program.
^
Homeo^emhip - The need to assist low-income qualifying households in purchasing singleamily housing is a high priority that the City proposes to meet by utilizing HOME funds for
assistan^ with down payment, closing costs or gap financing by providing subordinate City
loans. The complete program guidelines are available for public review at the City of San Jose
Housing Department.
Planning and Administrative Costs - Ten percent of the total allocation (or $431,700) will be
used forpanning and administrative costs associated with administering and managing activities
assisted by HOME funds by the PJ.
Included in admnistrative cost is a proportionate amount to be paid for a consultant who will
produce a Fair Housing Study. This study, mandated by HUD, is being undertaken in
conjunction with all entitlementjurisdictions in the County of Santa Clara.
Conmunity Housing Development Organizations - In compliance-with HOME statute and
regulatioi^, the City of San Jose will set aside a minimum of 15%(or $647,550)for Community
Housing Development Organizations(CHDOs)to carry out HOME-eligible activities.
An additional 5% (or $215,850) may be used to support operating expenses of CHDOs working
Sor^bleS^ny^
necessary to allow the developer to proceed with their plan to provide
Most of the nonprofit housing developers with whom the City has worked in the past do not meet
the federal defimtion of a OIDO. SpecificaUy, these nonprofit organizations need to satisfy the
requirement for maintaimng accountability to low-income residents as well as the board
composition requirement. Many of these nonprofits are currently investigating ways and means
of reorgamzmg to meet CHDO requirements. The City is ready to provide assistance and
tecnmcal recommendations to assist nonprofits in becoming CHDOs.
HOME PROGRAM FUNDS
Summary of Matching Contributions - In accordance with the match requirements, the City of
San Jose will provide a 25% match.
.
City of San Jose
Consolidated Plan
One-Year Action Plan,2001
32
>
BMR Information for Santa Clara County cities
City
Los Gates
Got BMR?
Yes
Required
Affordability
Period (in
years)
No. of Units
Number
Number
in Current
Estimated
Estimated
Ongoing
33
Housing
Supply
1
4
Yes
30 years
approx.75
10
10
Cupertino
Yes
99 years
140
20-30
?
Palo Alto
Yes
59 years
151 owner &
101 rental
(Includes 63
new In 2001)
63 rental units;
About 8 resale
owner units
new rentals
30 years
38
8
8
Sunnyvale
Yes
20 years
761
4
2
Campbell
Yes
25 years
13
4
6
30 years
58
9
40
Yes
James Walgren
(650)948-1491
Developers must provide BMR units In any multlfamlly projects,
projected 10-20% future requirement.
Vera Gil
Developers pay a fee for a fraction of a unit. Otherwise, units must be provided on-slte.
(408)777-3251
(650)329-2108
Jeff Pedersen
(408)615-2491
Barbara RIgney
(408)730-7254
Sharon Teeter
(408) 866-2137
South County Housing
BMR Program Is a Housing Element Policy, not an ordinance;
In-lleu fees allowed In some situations.
'Applies only If Redev Agency subsidy provided to defray loss of market rate.
Developers allowed to pay "In lieu" fee if fewer than 20 units In development.
BMR requirement for redevelopment project areas only.
Some Housing also provided by Housing Trust, borrower's own labor Is Included.
842-9181
Trust Fund)
Yes
Deed of Trust affordability requirement Is ongoing.
No New Owner
Yes
Milpitas
Housing Authority
Cathy.Slegel
Units; Estimate
Housing Coordinator
of 8 resales; No
Santa Clara
(also Housing
Comments
Nanie
and Phone
Rita Benn 364-0994
Los Altos
Gilrpy
BMR Program Contact
to come online to come online
in 2001
in 2002
55 years
668
28
162
Felix Relliord
BMR Units required In Redevelopment Areas.
586-3071
H/lountaln View
San Jos§
Yes
No
55 years
0
-
-
Developers allowed to pay 10% "In lieu" fee for not meeting 10% requirement. No money has
been collected to date.
*
-
-
-
*
2 THE HOUSING CRISIS IN CALIFORNIA
2.1 COMPARISONS
2.1.1 Comparison of California with the US
^
i
Figure 2 shows that over the past 12 years the median home price has always been
higher and also more volatile in the Western region ofthe US. Figure 3 compares the median
home price in California with that ofthe US over the period 1968-1999.It is interesting to
note that until 1974,home prices in California exceeded that ofthe US by a small margin
only. California home prices started diverging rapidly from that ofthe US in 1974 — the
period marking the escalation of defense contracts awarded to CA. Figure 4 shows that the
path ofhome prices in California followed the path of prime defense contracts awarded to
California.^
Even though California's median household income and rate ofjob creation has
always been larger than that ofthe US,housing affordability has always been sigmficantly
lower in California. Figure 5 compares the affordability indexes of CA and US over the past
12 years. The path ofaffordability is the inverse ofthe path ofhome prices. The fall in
affordability in California from 1988 to 1989 and again from 1998 onwards is miich steeper
in California. Nevertheless affordability has always been lower in California.
The National Association ofRealtors(NAR)measures the ability ofthe median
income family (or first time hoihebuyer)to qualify for a mortgage on the median priced
home(or a starter home). The index used by the California Association ofRealtors(CAR),
measures the share ofhomes within a specific market that a typical household can afford.
For example,according to the CAR affordability index, only 31% of Califorman households
13
can afford a mftdian priced single-family California home. For the US as a whole,53% of •
US households can afford a median priced single-family US home.
)
Figures 2-5
Median Home Prices; US vs. the Four Broad Regions, 1998-2000
Median Home Prices: US vs. CA,1998-2000
CA Home Price and Prime Contract Awards to CA,1960-1998
Affordability Indexes: US vs. CA,1988-2000
180i
250000-
West
Califbmia
160-
200000forth East
140
US
150000-
South
120-
UidVlfest
100000100
50000-
60
I
I
I
I
I
I
I
I
I
I
I
I 1 I I I 1 I I II 1 1 I I 1 I I I I I I 1 I I
I
70
88 89 90 91 92 93 94 95 96 97 98 99 00
75
80
85
< I I"1
95
90
Rgure 3 Median Home Price: CA vs US
Figure 2 Median Home Prices: US and 4 Broad Regions
70DOD contlBds
60<
50'
40'
eden Home Price
Calitbmia
30-
20
I
I
1
I
I
I
I
I
I
I
i
88 89 90 91 92 93 94 95 96 97 98 99 00
SO 62 M 66 6> 70 72 74 78 7a 80 82 84 as SS 90 92 94 ee !
Figure 4 CA Home Price and Prime Contract Awards to CA
Rgure 5 Affordaliaity Indexes; US and CA
Sources ofData:
Median Home Price ofUS and Four Regions: National Association of Realtors(NAR)
Median Home Price in CA and Affordability Indexes: California Association of Realtors
(CAR). Prime DOD Contracts: Department ofDefense.
14
Figure 6
Affordability Indexes: US vs. CA,1999-2000
55-
US
US
5a
46-
4a
CA
35.
CA
aa
2000
1999
Figure 6 shows that betweenl999-2000, affordability in California fell by a larger amount
than it did for the US as a whole.
The National Association of Homebuilders found that eight ofthe nation's ten least
affordable housing markets in the fourth quarter of 1999,and 14 ofthe top 25, were in
California. Overall, these 14 markets, indicated in Table 1 below,accounted for more than
two-thirds(72 percent) ofthe State's total population. The least affordable markets include
virtually all of California's coastal metropolitan areas from Santa Rosa to San Diego.
Surprisingly, the areas of Chico-Paradise and Stockton-Lodi were also included among the
25 least affordable metropolitan areas.
Table 2 ranks the states based on the two-bedroom housing wage. This is the hourly
wage needed in a 40 hour week,to be able to rent a 2-bedroom apartment, with housing
expense not exceeding 30% ofthe household income. The higher the rank, the less
affordable is the state. On this criterion, California is 1^ most expensive state in the US.
15
However a look at Tables 3 and 4 below indicate that the majority ofleast affordable MSAs
i
and counties nationwide are in California. This points to the high variation in affordability
within the State of California.
Table 1
The Nation's Most Expensive Housing Maikets
2
San Francisco, CA
Santa Cruz - Watsonville, CA
3
Eugene-Springfield, OR
4
Santa Rosa,CA
San Jose, CA
1
5
6
7
8
9
San Luis Obispo, CA
Salinas, CA
Portland - Vancouver, OR, WA
Lowell, MA
10
San Diego, CA
11
Laredo, TX
Oakland, CA
Santa Barbara, CA
Portsmouth - Rochester, NH,ME
Salem, OR
12
13
14
15
18
Los Angeles, CA
Flagstaff, AZ
Greeley, CO
19
New Bedford, MA
20
Vallejo-Fairfield-Napa, CA
16
17
21
Ventura,CA
22
Orange County, CA
23
Provo-Orem, UT
Chico-Paradise, CA
Stockton, Lodi CA
24
25
Source: National Association ofHome Builders(1999)
16
Table 2
State Ranks Based on Two Bedroom Housing Wage
Rank
State
2BDR Housing Wage
51
New Jersey
$16.88
$16.60
$16.52
$16.43
$16.04
$15.67
$15.22
50
•
District ofColumbia
49
48
Hawaii
Massachusetts
47
46
New York
Connecticut
45
44
California
Ala^
43
42
New Hampshire.
41
Nevada
M^land
40
hlinois
39
38
Delaware
37
36
Colorado
Rhode Island
35
Florida
Washington
34
Virginia
33
Arizona
32
Vermont
31
Utah
30
Oregon
29
Minnesota
28
Michigan
27
Pennsylvania
26
Texas
25
Georgia
24
23
Maine
Wisconsin
22
21
Ohio
Lidiana
20
16
North Carolina
New Mexico
Tennessee
Nebraska
South Carolina
15
South Dakota
14
Montana
19
18
17
13
Wyoming
12
Kansas
11
I(Mo
Iowa
Missouri
Louisiana
North Dakota
10
9
8
7
6
5
4
3
2
1
$15.18
^
Kentuclgr
Oklahoma
Alabama
Arkansas
Mississippi
West Virgirua
$14.15
$13.42 .
$13.39
$12.79
$12.65
$12.62
$12.34
$12.28
$12.20
$12.04 ,
$11.95
$11.91
$11.69
$11.67
$11.56
$11.34
$11.26
$11.16
$11.13
$10.83
$10.60
$10.30
$1023
$10.16
$10.04
$9.58
$9.56
$9.54
$9.51
$9.45
$9.42
$9.30
$925
$9.10
$9.03
$9.03
$8.98
$8.65
$8.62
$8.61
$8.27
$8.17
$8.12
Source: Out ofReach, National Low Income Housing Coalition, October 2000
17
!
Tables
Least Affordable Counties in the US
County
County Housing Wage for Two Bedroom FMR
Marin County, CA
San Francisco County,CA
San Mateo County, CA
Nantucket County, MA
Santa Clara County, CA
$28.06
$28.06
Darien, CT
Greenwich,CT
New Canaan,CT
. Norwalk, CT
$28.06,
$25.54
$25.15
$22.62
$22.62
$22.62
$22.62
Source; Out ofReach,National Low Income Housing Coalition, October 2000
Table 4
Least Affordable Metropolitan Statistical Areas(MSAs)in the US
MSA
Housing Wage for Two Bedroom FMR
San Francisco, CA
San Jose, CA
Stamford-Norwalk,CT
$28.06
$25.15
$22.62
Nassau-Suffolk, NY
$22.56
$22.00
$20.98
$18.94
$18.85
$18.83
Westchester County,NY
Santa Cruz-Watsonville, CA
Oakland, CA
Orange County,CA
Boston, MA-I^
Source: Out ofReach,National Low Income Housing Coalition, October 2000
18
2.1.2 Comparison Across California
Figure 7 compares affordability over the period 1988-2000 for five key areas of
California. San Francisco, Santa Clara, San Diego, Orange, and Los Angeles are areas
where affordability is significantly lower than the state average. In contrast, Riverside-San
Bernardino has always ranked high in affordability.
Figure 7
Affordability Indexes across California, 1998-2000
6(li
50-
Riv
n Bemadino
40-
.OS Ahgeies
nta Clara
inge County
30-
San Franci
20-
10
1
r-—I
1
r
88 89 90 91 92 93 94 95 96 97 98 99 00
Data Source: California Association ofRealtors
Table 5 below focuses on the affordability index across California over the past year.
19
Table 5
Affordability Indexes Across California
Region
Affordability Index(9/00)
Affordability Index(9/99)
US
53
54
CA
31
36
Monterey
N. Wine Country
San Francisco Bay Area
14
27
17
19
•
18
25
Santa Clara
20
26
San Luis Obispo
San Diego
Orange County
21
24
31
27
32
39
30
Ventura
32
Los Angeles
34
38
Lower Desert
36
44
Central Valley
46
51
Riverside San Bemadino
Sacramento
Hi Desert
47
51
49
67
72
56
Source: California Association of Realtors, October 2000
According to the report Raising the Roof, California's raw land availability and
development capacity vary by area, with severd major metropolitan counties being the most
constrained. With appropriate reserves being maintained,Los Angeles, Orange and Santa
Cara counties will lack sufficient vacant suburban land to accommodate projected household
growth through 2010. For other counties, Alameda,Contra Costa, San Diego and Ventura,
will start running low on land after 2020.
Within California, Table 6 ranks the MSAs in descending order in terms ofthe
number ofhours a minimum wage worker has to work in order to pay the median rent.
Column 13 indicates how many hours a minimum wage worker needs to work per week in
order to be able to afford a 2 bedroom apartment at fair m market rent. Columns 4 and 5
indicate the maximum ^ordable monthly housing cost at 30% and 50% ofthe area median
20
income respectively. Comparing these columns with Column 11,the fair market 2 bedroom
apartment rent, indicates the gap between what these femilies can afford and what they have
to pay. The percentage ofpeople whose rent is more than 30% ofthe household income for a
2-bedrooth apartment is indicated in column 12. Under Federal standard adopted in 1981,
housing is affordable ifit consumes no more than 30% of household income. Ihsirai, Table
6 shows that housing problei^ are most heavily concentrated among families with incomes
at or below 50% ofthe AMI.
21
Table 6
Profile ofLow Income Renters Across California (National Low Income Housing Coalition,2000)
2
5
6
7
8
10
11
12
MSA
MEDFAMMEDINCMO 30M
50M
80M
lOOM
RMEDM RAFF
FMR2
FMR3
%_2 HRS2 2BRCH
San Francisco, CA
San Jose, CA
Santa Cruz-Watsonville, CA
Oakland, CA
$77,486
$91,634
$62,408
$581
$687
$969
$4,245
$4,817
$3,286
$1,273
$1,445
$986
$2,001
$1,792
$1,517
195
20.02%
175
12.94%
55%
146
12.54%
$522
$869
$3,323
$997
$1,459
$1,308
$1,091
$985
56%
$780
49%
132
12.58%
Orange County, CA
Santa Rosa,CA
Santa Barbara-Santa Maria-Lompoc, CA
$73,732
$60,387
$54,938
$54,319
$54,927
$71,857
$52,912
$51,216
$48,000
$56,654
$53,919
$47,601
$1,937
$2,291
$1,560
$1,739
$1,843
$1,510
$1,373
$1,358
46%
$468
$1,550
$1,833
$1,248
$1,391
$1,475
$1,208
$1,099
$1,086
$3,926
$3,147
$2,780
$2,741
$1,178
$980
42%
131
11.12%
$944
$946
50%
127
12.38%
54%
120
3.36%
52%
115
12.14%
49%
112
13.11%
4.34%
3
Bakersfield, CA
Visalia-Tulare-Porterville, CA
Fresno, CA
$46,527
$44,715
$37,514
$37,301
$37,901
$38,700
$35,714
$38,004
$6,457
$7,636
$5,201
$5,796
$6,144
$5,032
$4,578
$4,527
$4,577
$5,988
$4,409
$4,268
$4,000
$4,721
$4,493
$3,967
$3,877
$3,726
$3',126
$3,108
$3,158
$3,225
$2,976
$3,167
Yuba City, CA
$36,923
$3,077
Vallejo-Fairfield-Napa, CA
San Diego,CA
Ventura, CA
Los Angeles-Long Beach, CA
Salinas, CA
San Luis Obispo-Atascadero-Paso Robles, CA
Yolo, CA
Sacramento, CA
Riverside-San Bernardino, CA
Stockton-Lodi, CA
Modesto, CA
Ghico-Paradise, CA
Merced, CA
Redding, CA
$69,555
4
$553
$453
$412
$407
$412
$539
$397
$384
$36a
$425
$404
$357
$349
$335
$281
$280
$284
$290
$1,145
$922
$755
$687
$679
$1,099
$898
$1,437
$661
$1,058
$640
$1,024
$600 - $960
$708
$1,133
$674
$1,078
$952
$595
$582
$931
$559
$894
$469 . $750
$466
$746
$474
$758 ,
$484
$774
$687
$1,373
$1,796
$1,323
$2,830
$3,692
$760
$893
$950
$2,876
$3,101
$2,332
$2,512
$2,571
$2,422
$2,325
$2,265
$1,784
$2,012
$1,849
$1,960
$1,846
$1,887
$738
$923
$1,847
$268
$285
$446
$714
$475
$277
$462
22
$1,280
$1,200
$1,416
$1,348
$1,190
$1,163
$1,118
$938
$933
$948
$968
9
$834
$897
$822
$857
$849
$839
$1,107
$863
$930
$700
$754
$771
$727
$1,350
$1,364
$1,315
$1,250
$1,190
13
14
1
$1,167
$1,103
$1,055
$1,074
$1,045
38%
111
46%
105
4.25%
42%
103
3.47%
54%
101
3.33%
$688
$953
46%
92
3.48%
$645
$621
$894
42%
86
4.95%
$861
43%
83
3.87%
44%
82
3.46%
44%
79
3.38%
$829
$782
$773
$752
$698
$613
$680
$592
$853
$825
$800
$770
54%
78
3.39%
46%
75
3.38%
$535
$584
$604
$555
$557
$538
$747
48%
72
3.54%
$588
$526
$731
44%
70
3.41%
$554
$566
$524
$731
47%
70
3.44%
$517
$720
46%
69
3.24%
$554
$505
$704
46%
68
3.41%
Explanation of Abbreviations in Table 6
MEDFAM
MEDDSrCMO
SOM
50M
80M
lOOM
RMEDM
RAFF
2000 Estimated Annual Median Family Income(HUD)
2000 Estimated Monthly Median Family Income(HUD)
Max. Affordable MontUy Housing Cost at 30% offamily median
Max. Affordable Monthly Housing Cost at 50% offamily median
Max. Affordable Monthly Housing Cost at 8,0% offamily median
Max. Affordable Monthly Housing Cost at family median
2000 Estimated Monthly Renter Median Income(NLIHC)
Max. Affordable Monthly Housing Cost at renter median
FMR2
Fair Market Rent for a unit with two bedrooms
FMR3
F^ Market Rentfor a unit with Ihreebiedrooms
%_2
HRS2
Estimated % ofRenters Unable to Afford FMR for 2 BR Unit
Work Hours per Week Necessary at Minimum Wage to Afford 2 BR Unit
2BRCH
Percent change in 2BR Housing Wage, 1999-2000
Source: National Low Income Housing Coalition
2.1.3 Ramifications ofthe Affordable Housing Crisis
An article, in the Los Angeles Times on January 7,2001, describes how the affordable
housing crisis is affecting residents in terms ofcommute time and displaced families in California,
and businesses in terms ofrising costs^
■
A Santa-Cruz paramedic has a two-hour commute to hisjob.
■
The mayor of San Carlos resigned because he had not been able to find an affordable
place in that small Bay Area city.
■ In Stockton, a family with thousands of dollars to spend lives for weeks in a shelter for
the homeless before finding an apartment.
■ In San Ltiis Obispo,college students take classes in interviewing with landlords. Many
rent by the bed instead ofthe room.
■ In the farm town ofLos Banos,a third ofthe residents rise before dawn for a bumper-tobumper commute to the Silicon Valley—^nearly 100 miles—^because living closer would
cost so much more.
23
■
Where a family could once afford at least a cheap apartment in a transitional area, now
they are doubling up, or bunking 10 to a motel room along places like "the Strip" in
Salinas.
■ A fire captain for Santa Gruz County lives in trailer home with his four kids.
■
An accountant in San Jose moves to Los Banos in order to be able to afford a fivebedroom house.
■ An assistant professor of electrical engineering at San Jose State University simply
cannot afford to buy a house there.
■ An administrative assistant at the University of California at Irvine College of Medicine
commutes a 4-hour round trip firom her home in Riverside Coimty.
■ A couple—^both teachers—^with a combined income of$100,000 per year can only
afford a crammed apartment in Mountain View for $1,300 a month.
■ The efifectS-of the squeeze are spreading the costs to businesses: driving up retails lease
costs, and are pushing companies to relocate to find housing that their employees can
afford
■ In Santa Cruz,three teachers who had accepted job offers in the district reneged as soon
as they started looking for homes
2.2 Estimates of the Number of Low Income Families
In order to respond to the growing population and household growth ofthe State, and
ensure the availability of decent affordable housing for all income groups, the State of
California enacted law requires each Coimcil of Governments(COG)to periodically
distribute the State identified housing need for its region. The Department of Housing and
Community Development(HCD)is responsible for determining this regional need, and
-24
initiating the process by which each COG must then distribute their share ofstatewide need
to alljurisdictions within its region. Table 7 presents the projected needs of housing by
mcome category, and has been constructed from data provided by the COGs across the
State.
Table?
Construction Need of Housing Units by Income Category in the Areas with a Middle
Income Affordability Problem
Jurisdiction
Marin County
San Francisco
Total
Very
Projected
Need (7.5
orSyrs)
Low
Income
6,515
20,372
1,241
5,244
16,305
3,214
Low
Moderate
Incomes
Need
618
57,991
11,424
7,733
26,114
VallejoFairfield-Napa
10,423
Santa Rosa
Orange County
Los Angeles
869
520
455.5
47
15,990
1,567
4,305
7,219
2,174
449
1563
5,173
15,659
25,735
7,732
1,291
1275.9
969
1,959
7,086
2,567
11,327
1,031
3,482
2,238
5,337
2,364
7,654
75,502
181,885
1,539
15,047
42,356
9,725
29,174
2,120
16,074
36,179
3,025
34,657
74,212
1,021
10,067
24,251
4,060
3,496.2
2,298
120,663
27,518
18,376
24,411
50,359
16,088
7,208
212
14,842
18,765
38,244
12,475
20,062
83.2
2,721
16,231
4,536
21,960
8,790
37,237
2,752
19,058
1846
4205
403
County
San Bemadino
Mfle
2,716
970
County
Riverside
(Sq.
Miles)
2,930
7,363
County
Oakland
San Jose
Persons
Per Sq.
1,726
5,639
County
Santa Clara
Land
Area
2,126
City/County
SanMat^
Average
Yearly
Above
Moderate
93,568
21,685
County
Ventura County 20,641
San Diego
95,479
4,595
20.051
790
670.9
r
Notes:
for rows 1-7 is January 1999-June 30,2006, and the data is from
^sociation ofBay Area Governments ABAG website. The time period for rows 8-13 is
from January 1^8-June 30,2005,and the data is from Southern CaHfomia Association of
A
*
Ji*
J? T
is a 5-year period from July
Jo
T Area is for^1990,and the data is from
Association
of(^uickfacts
Governments
(SANDAG).
Land
California
from the U S
cer^B^au website. Persons per square mile is for 1999, and the data is from California
Qmckfacts from the U.S. census Bureau website. For the sake ofcomparison it may be
noted that the persons per square mile is 212.5 for California and is 77.1 for the US.
25
It can be seen from Table 7 that the counties with the greatest projected growth in ■
terms of average annual need are: San Diego County,Los Angeles County,San Bemadino
Coimty, and Riverside Coimty.
Table 8 estimates the percentage oflow-income, moderate income,and above
moderate-income households in key regions in California, based on the 1990 census data.
The proportions in Table 8jhave been constructed from data on the number of households
provided by The Comprehensive Housing Affordability Strategy(CHAS),in a study
commissioned by HUD in order to provide local housing personnel with useful housing
data. The limitation ofthis study and aU other studies that focus on the entire State is that
the data is based on the 1990 census. Table 9 ofthis report uses the proportion listed in
Table 8, and obtains the number oflow-income households for 1999. Research conducted
by the Public Policy Institute of California(Reed, 1999)^points to widening ofthe income
gap between the rich and the poor. It therefore appears very likely that the estimates in
Table 9 underestimate the number oflow-income households. In the absence ofthe
availability of Census 2000 numbers,these are the best estimates that can be constructed on
a uniform basis across the key regions in California.
26
Tables
Estimates of the Proportion ofHouseholds that are Low Income
(Calculated from 1990 census data)
Comity
Los Angeles
Marin
Orange
SanDiego
Income Range
Santa Clara
Santa Cruz
Renters with any
Owners with any
Problems
Problems
y Low Income(0-50% of AMI)
27.83%
17.95%
4.1%
Low Ihc(51%^0% ofAMI)
15.28%
7%
2.89%
Mod Income(i81-95% ofAMI)"
8.P/0
2.3%
1.74%
Above Mod Ihc(>95% ofAMI)
48.79%
3.81%
8.95%
AllHooseholds
100%
31.06%
17.66%
Very Low Licome
17.27%
8.5%
3.9%
Low Income
7.9%
3.3%
1.6%
Moderate Income
6.8%%
2.33%
1.49%
Above Moderate hicpme
75.03%
3.85%
13.89
All Households
100%
17.98%
20.88%
Very Low Income
19%
10.53%
422%
Low Income
9.6%
4.52%
2.1%
Moderate Income
8%
2.6%
1.92%
Above Moderate Income
63.4%
3.85%
13.09%
All Households
100%
21.48%
21.33%
Veiy Low Income
20,6%
12.69%
3.57%
Low Income
17.53%
7.5%
3.1%
Moderate Income
8.48%
1.7%
1.8%
Above Moderate Licome
53.42%
2.60%
10.10%
All Households
San Francisco
Households
. 100%
18.57%
24.49%
2.6%
Very Low Licome
30.87%
19.83%
-
Low Licome
10.24%
4.9%
1%
Moderate Licome
8.57%
2.9%
0.78%
Above Moderate Licome
50.32%
4.56%
5.52%
All Households
100%
32.19%
9.9%
Veiy Low Licome
18.81%
10.45%
3.68%
Low Licome
7.5%
4.8%
1.%
Moderate Licome
7.22%
226%
1.62%
Above Moderate Licome
66.48%
2.88%
1420%
All Households
100%
20.39%
21%
Veiy Low Licome
24.66%
1220%
Low Licome
14.17%
5.3%
2.76%
Moderate Licome
8.28%
2.1%
2.3%
Above Moderate Licome
52.89%
2.73%
12.19%
AllHooseholds
100%
22.33%
22.75%
^
5.5%
Source: Constructed from data provided by CHAS. Notes: percentages are with respect to total
number of households. *Most other sources t5^ically extend the range for moderate income
to 120% ofthe AMI.
27
•t
It can be seen from Table 8 that the percentage of households that are 0-80% ofthe
HUD specified Area Median Income varies among comties(based in the 1990 census). As
a percentage oftotal households in that county it is 43.11% in Los Angeles,41.11% in San
Francisco,38.83% in Santa Cruz,38.13% in San Diego,28.6% in Orange County,26.31%
in Santa Clara County,and 25.17% in Marin County. It can also be seen that in most cases,
the single category "wifii the largest proportion of households with any housing problems is
the category: very low-income renters. However,in Marin County and Santa Clara County
the single category wifri the largest proportion of households that have any housing
problems is the category: owners with incomes above 95% ofthe AMI. In the coimty of
Santa Cruz these two categories are equal in size, and in Orange County,the proportion of
very low-income renters is only slightly larger than the proportion of above moderate
homeowners with any problems.
Table 9 presents the estimated number of very low-income and low-income
households and the number ofrenters and owners in these categories with any housing
problems in 1999. These estimates have been calculated by multiplying the proportions
provided in Table 8 with the estimated number of households in 1999. The estimated
number of households is obtained by taking the estimated population for 1999 from
California Department ofFinance website and dividing the population by 2.94, which is the
e number of people per household for CA for 1999.
28
Table 9
Number of Low Income Households in 1999(Estimated)
County
Los Angela
Marin
Orange
San.Piego
San Francisco
Santa Clara
Santa Craz
Income Range
Households
Renters with
Owners with
Any Problems
any Problems
Very Low Income
926,720
597,722
133,197
Low Income
508,813
233,095
96,235
Very Low Income
14,491
7,132
3,272
Low Income
6,628
2,769
1,342
Very Low Income
181,837
100,776
40,387
Low Income
91,875
43,258
20,097
Very Low Income
202,041
124,461
35,013
Low Income
171,931
73,558
30,404
Very Low Income
83,706
53,770
7,050
Low Income
27,766
13,286
2711
Very Low Income
109,891
61,050
21,499
Low Income
43,816
28,042
8,764
Very Low Income.
21,254
10,515
4,740
Low Income
12,213
4,568
2,378
i
Source: US Census Bureau, California Department ofFinance, and Comprehensive
Housing Affordability Strategy
From Table 9 it can be seen that Los Angeles tops the list in terms ofthe number of
total very low-income and low-income households; very low-income and low-income
29
renters with any problems; and very low-income and low-income owners with any
problems. This is followed by San Diego County and Orange Coimty.
3 LOW INCOME HOUSING ASSISTANCE
The first part ofthis chapter(Section 3.1) provides an overview ofthe major forms of
low-income assistance that are being used by local housing authorities in California. The
second part ofthis chapter(Section 3.2)examines whether these forms ofassistance will be
impacted by planned middle-income housing assistance.
3.1
Types of Housing Assistance
In general the types oflow-income assistance available to a local housing authority in
California can be classified into:(A)Federal Housing Funds that are usually formula-based
and apportioned directly to the jurisdiction,(B)Redevelopment Housing Set-Aside Funds at
the county or city Level, and(C)funds that are accessible to a housing authority through
application and competition, or forming partnerships with agencies that control the funds.
3.1.1 Federal Funds that are Formula Based
1. Section 8 Rental Assistance Program
Federal housing programs started in the 1930s as production programs. Construction
of public housing created jobs during the Depression and increased the stock of affordable
housing. Nationwide there has been very little construction of public housing since the
1970s. The production oflow-cost units was supported for a period oftime primarily rmder
the Section 8 program created in 1974,after the government stopped funding the production
of public housing. Under this program, private entities receive subsidies fi'om the Federal
. ■
j
government to bmld and own projects. The Federal government also subsidizes the rent of
30
tenants in these projects for a period oftime, generally 20-40 years. New construction of
these projects halted in the early 1980s.
'
Since the early 1980s, most new housing commitments have been in the form of
tenant-based subsidies, under the Section 8 and voucher and certificate programs. Congress
had frozen the program at zero new vouchers for five consecutive fiscal years between
1994-1998. The bill in Fiscal 2001 is expected to fimd 79,000 additional Section 8 vouchers
rr*i •
rd
nation wide,up firom 60,000 last year, and renew all expiring vouchers. This marks the 3
straight increase in Section 8.
HUD has two main engines for making rental housing affordable: the Section 8
program, which subsidizes rents, enabling low-income families to rent privately owned
housing; and public housing units owned and operated by local authorities of public
^
housing. Program efforts in these and related areas include new incremental housing
vouchers, revitalizing distorted public housing(HOPE program). The HOPE VI awards
grants to local housing authorities to address creatively the physical, social, and fiscal
problems of poor-quality public housing.
HUD Section 8 funds are transferred to the account ofthe local housing authority
monthly- The housing authority then disperses rent payments to the landlords who
participate in the program. The housing authority receives as a part ofthe transfer a certain
flmt(for example,$59 in Orange County)in operating reserves for administrative fees.If
efficiently operated this more than pays for the admin expense and the surplus can be
accumulated.
31
2. Community Development Block Grants(CDBG/
Each hoiising authority or entitlement city receives an annual allocation from HUD,
which it then distributes through an annual application cycle. The cap on administrative
expenses in CDBG is 20% ofthe annual grant. In general, CDBG is the most flexible
program as long as activities meet one ofthe 3 national objectives:
■
Offers benefit to low- and moderate-income people.
■
Aid in the prevention or elhnination ofslums and blight.
■ Meet other community development needs that present a serious and immediate threat to
the health or welfare ofthe community.
^
I
3. HOME Investment Partnership program
The Federal government established the HOME program in 1990 to improve and/or
expand a jurisdiction's affordable housing stock, and ajurisdiction must invest aU HOME
Investment Program funds in affordable housing. The administrative fee allowed for
programs using HOME grants 10% of each grant. HOME funds must be matched 25% by
non-federal sources. HOME program require deeper affordability than CDBG,i.e. it
reaches lower income families,^ HOME fimds can be used for the following activities that
promote affordable rental housing and lower-income home ownership: acquisition, new
" construction and reconstruction, moderate or substantial rehabilitation, homebuyer and
tenant based assistance, and planning and support services.
32
4. Homeless AssistanceJiinds, including SuperNOFA and Emergency Shelter Grant
HUD fimds many homeless needs through anmial notifications offimding
availability(SuperNOFA), The Federal government also grants jurisdictions Emergency
t
Shelter Grants. ESG fimds are granted to jurisdictions in proportion to the previous year's
CDBG allocation.
3.1 .2 Redevelopment Tax Increment Housing Set-Aside Funds and Countv/Citv Owned
Property
Many counties and cities as well have established redevelopment areas. Under State
law,20% of gross redevelopment revenues must be set aside into a low-income housing
fimd and be spent on eligible housing activities. Cities and coimties typically focus their
programs on households earning less than 80% of adjusted AMI,although redevelopment
dollars can serve households with incomes up to 120% of AMI.
Counties and cities typically own several properties such as shelters, community
centers, homing developments, and rental projects. The most recent Housing Element for
Orange County notes that virtually all parcels imder coimty control "present serious
development obstacles" such as proximity to unsuitable uses(inactive solid waste disposal
sites) or difficult site conditions.®
3.1.3 Other Sources ofFunding ^
These are accessible to counties through application and competition or through
forming partnerships. They can be subdivided into the following forms:
Federal Tools
Tax Credits: Since the mid 1980s, subsidies for the production ofnew rental housing
have generally been provided under the Low Income Housing Tax Credit,in addition to the
33
and the HOME program. The Low Income Housing Tax Credit, LIHTC,created in 1986, is ■
a dollar for dollar tax credit from the Federal government,taken over ten years by investors
in qualified housing developments. To qualify,the housing must,at a minimum,have 20%
ofthe nnits affordable to those at 50% ofthe area median income(AMI),or 40% affordable
to households at 60% of AMI. The Federal government allocates a certain amount oftax
credits every year to each system on a per capita basis. The State of California then runs a
competition to award these credits to sponsors ofhousing for low-income households. The
Federal government allows two forms ofsubsidy:"nine percent^ and "four percent. The
terms 9% and 4% refer to the rough percent ofthe total qualified development costs that
may be taken each year for the 10-year period. This is a large contribution ofequity money,
which unlike a loan doesn't to need to be repaid. Therefore rents need not pay as large as a
first mortgage, as would otherwise be needed. Therefore,the rents can be lower,so lower
income people can consequently afford the rents.
Large shares ofthe units supported through the LIHTC or the HOME program are
not affordable to poor families. Moreover most ofthe poor renters v4io live in these umts
can do so only because they receive a rental subsidy to help them pay the rent.
Tax-Exempt Bonds: Cities, counties, housing authorities, and redevelopment
agencies can issue tax exempt bonds to finance the construction or acquisition and
rehabilitation ofrental housing, or to assist first time homebuyers with mortgages for the
purchase ofnew or existing housing. Borrowers tiien pay offthe bonds with revenue form
rents. The issuers are not responsible for the bond payments. As in the case ofthe LITC,a
certain ammmt ofbond allocation authority for tax-exempt "private activity bonds" is
34
granted on a per capita basis to each state. The State of California then allocates bond
issuance authority to users through a set process.
Multifamily requirements: The entire property must be maintained as reiital housing
for as long as bonds are outstanding, but in no case for less then 15 years. Federal law has
established 2 alternative income standards. Either 20% ofthe units ihust be affordable to
households at or below50% ofthe AMI or 40% ofthe units must be affordable to
households below 60% ofthe AMI. An issuer may also request and receive a private
activity bond allocation from the California Debt Limit Allocation Committee(CDLAC)
i
prior to issuance. Such allocations are very competitive.
Single-Family Requirements: The income ofthe borrower may not exceed 90-115%
ofthe median income depending upon household size and whether homes are new or
existing houses. The maximum eligible sales price is established by the IRS based upon
90% ofthe average area purchase price.
Section 202 Supportive Housingfor the Elderly: Capital advances are made to
eligible private, nonprofit sponsors to finance the development ofthis type of assisted living
rental housing. The advance is interest free and does not have to be repaid, so long as the
housing remains available for very low-income seniors for at least 40 years. Project rental
assistance covers the difference between the HUD-approved operating cost per unit and the
amount the resident pays.
Section 811 Supportive HousingPro^amfor the Disabled: Provide capital grant
funding for projects and rental assistance to disabled households.
FHA Title 1 Home ImprovementLoans: These loans require no equity froin the
borrower. Tbey are government-backed by the Federal Housing Administration. They
35
reduce risks for lenders, and consequently,lenders reduce underwriting standards. Current '
market interest rates are 12-14%. Using bond jSnancing,the rate can be subsidized to below
7%. FHA title 1 loans offer counties a home improvement loan tool that readily attract
private partners and stretch county resources.
HUD also provides funding for the Self-Help, Homeownership Opportunity
Program, which uses "sweat equity" to produce affordable homes for new homebuyers
State Tools
State Tax Credits: The State of California has also established a low-income housing
tax credit program, which parallels many ofthe provisions ofFederal tax credit rules. The
California Tax credit Alloc^on Committee(TCAC)allocates this program in conjunction
with an allocation ofFederal tax credits. The tax credit awarded equals 30% ofbasis, taken
over 4 years. As for Federal tax credits, completion of State tax credits is very high.
California Housing Finance Agency programs: CFA administers much ofrental and
ownership housing programs funded with the proceeds oftax-exempt bonds.
Combination of City, State and Federal Tools for Home Ownership
The majority ofthe homebuyer programs fall in to one of3 types: Silent Second Loans,
Credit Certificates, and Mortgage Revenue Bonds.
L
Silent Second Loan:(known also by other names such as
Loan,Shared Equity
Loan, etc.) is a loan that provides the difference between what a home costs and what the
buyer can afford to pay for it(the first mortgage plus down payment). Because this loan
requires no monthly payments in initial years(is silent), and is secured in second position
(second)by a recorded Trust deed,it is called a "silent second" loan. The payback comes
later, when the household wiU probably be more able to afford it
36
Mortgage credit Certificates: MCC is not a loan; it provides individual homeowners'
with a tax credit ofup to 20% ofthe interest on a mortgage. This program is very
constrained due to competition for CDLAC allocation. Mortgage lenders take the extra
income resulting from the MCC into accoimt when underwriting the loan,thus increasing
the possible loan amount*
Mortgage Revenue Bond Loan(MRB): This is a first mortgage with a fixed-rate, 30year term and a lower than market interest rate, therefore lower monthly payments.
The Southern California Guide to Homebuyer Programs illustrates that a family,
which wants to buy a $150,000 home with $5,000 of savings, would be making monthly
payments of$1,014 without any assistance. They would be paying $909 with a Silent
Second,$879 with a 15% MCC,and $916 with an MRB loan. According to Affordable
Housing Applications,Inc. In the year 1998,over $400 million was allocated to help state
and local agencies fund their MCC and MRB programs, statewide. In spite of being heavily
funded, many homebuyers have not heard ofthese programs, according to AHA,because
small government offices, which have no money for advertising, offer them.
Private Tools
The Federal National Mortgage Association Down Payment Assistance Program,,
called "Fannie Mae," offers a program to provide second mortgages to homeowners. This
second mortgage can serve as the down payment and closing costs on home purchases. The
program requires a city or county to post a reserve fund equal to 20% ofan amount than
Fannie Mae then makes available for such second mortgages. Resources are leveraged at a
minimum of5:1. Flexible income restrictions permit use by households above 80% ofthe
AMI
37
Each county has private lenders who are eager to lend on new development, home '
improvement,home purchase and building rehabilitation. Many ofthese institutions are
also motivated to get CRA(Community Reinvestment Act)credit by lending in lower
income areas or for community development projects. Counties may find opportunities for
leverage among these individual programs perhaps in conjunction with other programs such
as Fannie Mae's downpament assistance programs.
Through Ginnie Mae,and by setting housing goals for Freddie Mac and Fannie Mae,
the FHA Department provides a broad range of mortgage products and increases the
liquidity ofthe mortgage market These activities increase the attainability of mortgage
credit, especially for first-time, low-income, minority, and central-city hoinebuyers. The
FHA also guides potential homeowners through the complex process of home buying and
will more eflBciently provide information and assistance to FHA's clients, lenders, and
borrowers.
In FY 2001,FHA is proposing to develop a new hybrid adjustable-rate mortgage.
(This is expected to enable FHA to help 55,000 additional families become homeowners in
FY 2001.)HUD is also proposing to.continue the Administration's Partnership for
Advancing Technology in Housing(PATH),a public-private initiative that helps creates
communities by spurring improvements in techniques for housing design and construction.
3.2 Proliferation of Middle Income Assistance and Impact on Low Income Housing
Assistance
Home prices are rising faster thm incomes, creating the "Food Chain Effect" or the
"Non-Trickle Down Effect." Because home prices are rising faster than incomes, especially
for incomes at the lower to middle portions ofthe scale, many so called middle-income
buyers are now forced to buy homes that were previously bought by low-income
38
households. As moderate-income buyers dip into the housing market oflow-income buyers',
the stock of affordable homes available to the low-income buyers rapidly depletes, causing
their prices to rise even further. More specifically, in the case ofthe Mortgage Credit
Certificate Program,discussed above, middle-income households that qualify will attempt to
buy homes that are priced at or slightly below the allowable threshold ($204,937 in Orange
County). This will increase the jHice ofsay a $190,000 home to the threshold value of
$204,937.
'
The proliferation of middle-income housing assistance has been typically occurring
in the following three ways:
(1)Explicit relaxation ofFederalfunding rules. In recent years, some ofthe Federal
funding assistance that is available has begun to shift fi'om poor families toward families at
somewhat higher income levels. From 1988-1996, Federal law targeted a majority ofthe
housing assistance becoming available through turnover or new subsidy commitments under
the Section 8 and public housing programs to families who met'Tederal preference rules."
Typically, that meant households who paid more than 50% oftheir income for rent or had
lived in severely deficient housing. These were the worst-case needs. In 1996,these
preference rules were suspended. As a result, administrators of housing programs had the
discretion ofusing housing assistance through Section 8 to households at somewhat higher
income levels. This is true not only for project based assistance, but for tenant based
vouchers and certificates as well.
The apparent rationale for bringing more moderate-income families into public
housing projects was to improve the income and employment mix in such projects. There is
no similar rationale for shifting tenant-based vouchers and certificates that help,families rent
39
units on the private market from poor femilies offamilies at higher income levels. It is
cheaper for the Federal govt to provide vouchers for people with slightly higher incomes.
The consolidated plans of most counties indicate that preference for Section 8
vouchers will be given to low and extremely low-income groiq)s. The 1998 Quality Housing
and Work Responsibility Act maintained that households with no more than 50% ofthe
median income are eligible for the program. In addition,the regulations state that 75% of
new admissions to the program must have incomes at or below 30% ofthe area median
income.
Housing authorities are therefore challenged to monitor their issuance ofhousing
vouchers to ensure that at least 75% are given to households with less than 30% of median
incomes. Thus,it can be seen that HUD is targeting the assistance to the lowest income
group rather than those with higher incomes.'
(2)Relaxation ofthe Income Cap Exemption on CDBG. In early 2000,HUD granted
an income cap exemption to the 10 highest cost housing markets in the nation. Prior to this
act of Congress,the income cap in high cost areas ofthe country,such as Santa Clara
County and Orange County, was set at 65% ofthe AMI and not 80% ofthe AMI. This had
a negative impact on individuals with incomes between 65% ofthe median and 80% ofthe
median. The Santa Clara Urban County resident in need ofrepairs for code violation would
be ineligible for housing rehabilitation loans ifthe household income for a family of4
exceeded $56,950.
The relaxation ofthe income cap in high cost counties in CA is justifiable when we
consider the wide discrepancy between the median home price in Santa Clara County,
$530,000 in October,2000 vs. that of$133,000 for the US. In the first fiscal years of
40
operation under the relaxed income limits, Santa Clara Urban County Officials used 90% of
die ^ditional funds generated to serve the low and very low-income groups.
(3)Initiatives Such as "Teacher Next Door" and "Officer Next Door". The Teacher
Next Door Initiative took effect in 1999 and is modeled on UUD's Officer Next Door
Initiative that took effect in 1997. "When we help teachers save money on homes in poor
neighborhoods, we help revitalize those neighborhoods," Cuomo said. "The Teacher Next
Door Initiative will attract teachers to live and work in urban school districts where they are
needed most, and will give them new opportunities to mentor their students outside the
classroom."
Homes offered for sale at half price under both the Teacher Next Door and the
Officer Next Door Initiatives were previously insured through FHA and then foreclosed
when owners failed to make mortage payments. The homes ^e located in designated
revitalization areas. Revkalization areas are typically in low- and moderate-income
neighborhoods, have many vacant properties, and often have high crime rates. They are
considered good candidates for economic development and improvement
Neither the Teacher Next Door nor the Officer Next Door Initiatives cost taxpayers
any.money. Cost-saving management improvements allow FHA to reduce the price of
homes and reduce its mortgage insurance premiums to teachers and officers. No tax dollars
are used to fund FHA programs.
Any public schools teacher who is employed full-time is eligible to purchase a home
under the Teacher Next Door Initiative ifit is located in a revitalization area within the
school district in which the teacher works. Teachers are required to live in a home purchased
under the initiative for at least three years.
41
.
Federal tax credits to builders oflow-mcome housing are not adequately indexed to ■
inflation. These tax credits also become insufficient as interest rtes rise. Consequently the
LITC and the HOME do not produce much housing that is affordable for poor households
that are not already being subsidized through another housing assistance program.
Indexation ofthese grants to inflation should alleviate some ofthe concerns oflow-income
households.
\
The Low-Income and Middle Income Households as Two Independent Markets
An analysis ofthe types oflow-income assistance programs in Section 3.1, given
above,combined with face-to-face or telephone conversations with housing personnel in
two major counties in California,indicate that the funds used for addressing middle^income
ownership are different from the funds used to address low-income affordability. Section 8
vouchers and other Federal sources offunding predominantly finance the extremely low- to
low-income housing market. Many housing personnel believe that it is simply not feasible
to provide the large amounts ofsubsidies required to convert the low-income households
into homeowners. Homeownership assistance is mostly provided to households who are at
higher income levels, up to 100% to 120% ofthe area's median income. A significant part
ofhomeownership assistance comes from forming partnerships with private agencies such
as Fannie Mae.
Conclusion to Chapter 3
The situation ofthe low-income households is getting worse as manifested in the
long waiting list for Section 8 vouchers, and the widening gap in the availability of
affordable rental housing. The number oflow-income households who rent rooms in motels
because they cannot afford the security deposit and advance payment ofthe month's rent, is
)
42
rapidly rising in places such as Orange County. In Silicon Valley the number ofhomeless
people is far beyond what can be accommodated in homeless shelters, HUD apparently
relaxed its affordability standards in 1996, by relaxing the Federal Preference Rules. In
1998, however,HUD has reestablished the tighter requirements for qualification for Section
8 vouchers. On the whole HUD has a trend offavoring Section 8 assistance to low and very
low-income households.
Federal funds, such as HOME and LITC,impose requirements that they be used for
low-income households. The funds used to address middle-income afifordability come
primarily firom private sources. In terms ofleveraging coimty resources with these private
sources, it makes economic sense for coimties to provide down payment assistance to
households iq)to 120% ofthe area's median income. More importantly, many ofthe
middle-income hoiiseholds who receive homeownership assistance provide service that is
crucial to the community;they are teachers, police officer, newly hired university
professors,employees ofthe local government^ etc.
Furthermore, discontinuation ofincentives to encourage middle-income home
ownership will not necessarily translate into expanding housing affordability for the lowincome households. For these reasons it appears necessary that policy makers address the
low-income affordability crisis without decreasing assistance provided to near moderate-
income homebuyers. The next chapter presents steps that State policy makers can takft to
msure the solution to middle-income housing affordability does not make the low-income
affordability even worse.
43
(•
SANTA CLARA COUNTY HOUSING TASK FORCE:
REGIONAL HOUSING ACTION PLAN:
STRATEGY PHASE
The Strategy Phase ofthe RHAP Work began with analysis ofthe information
presented in the Research Phase. Based on that analysis, nine areas were identified
in a Preliminary Discussion Document(included) under which strategies could be
grouped. They are, as follows:
Land Use/Planning,
Funding,
Policy,
Land,
Rent Control/Tenants' Rights,
Corporate Involvement,
Community Involvement,
Living Wage/Low Income Supports, and
Planning Process Changes.
After additional work and discussion, a Full Committee Retreat was held on July 18,
2001. At that time the four working groups Needs, Interrelationship with other
Regional issues. Housing Broadly Defined, and Affordable Housing made
presentations about their Work to the full Committee.
In addition, the Committee "collapsed" the above issue headings into four groups,
as follows:
s
• Finance,
• Policy Issues,
• Community Involvement, and,
• Process/land use Planning.
Strategy sessions were then held to e3q)lore, discuss, develop, and prioritize
strategies for each ofthe four areas.
On August 15, 2001, the entire Committee met to develop a set ofrecommendations
now grouped for clarily under the following headings:
• Finance,
• Regional leadership/Expanded County Role,
• Legislation, and,
• Zoning/Planhing/Land Use.
The Strategy Recommendations under each category are included. On August 28,
2001, the committee will meet again to develop Action Steps for implementation of
the strategies listed.
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee
Strategies: Preliminary Discussion Document
Land Use/Planning
1. Inclusionary zoning/Below Market Rate Programs for affordable housing in new development
footprints and/or infill sites.
2. Update general plans and rez»ne in fevor ofhousing, especially high density, even high rise.
3.
4.
5.
6.
Because less land is available, we must build up,(not out into sprawl).
Zoning should allow mixed-use(housii^)development on corporate campuses.
Smart Growth: align housing development with transportation corridors.
Transit agency's land acquisition strategy should include investment in land acquistion for
housing.
7. Preservation ofHUD Financed Affordable Housing units.
8. Coordination ofgeneral plans across the cities in the area.
9. Create incentives for Other cities who are not developing as much affordable housing,
homeless shelters and transitional housing as they should
10. Establish a housing element in a regional basis that has teeth
11. Explore the opportunity for replacing existing low density SFD(substandard) with higher
density mixed income housing
12. Explore the use ofair rights ateve public owned properties (transit lines, etc.)
13. Plan for job growth that is balanced with housing production. Requires regional
inplementation
14. SJ: should permit secondary -"granny"- units horizontal or vertical an possible provide
incentives.
15. SJ: Increase General Plan review ofproposed housing (within greenlme)to twice a year or
more
16. SJ: Inplementation ofan inclusionary zoning policy for affordable housing on all new rental
projects in the city and study the impact ofadoption ofan inclusionary zoning ordinance in
other cities.
17. SJ:In the Specific Plan process for Central Coyote affordable housing needs must be
addressed. This could include inclusionary zoning, increased densities, increased public
funding, private fimding, etc.
18. SJ: Increase all GP ranges throughout City - raise the range
19. SJ: Council and Planning staffsupport the fiill range ofGP densities notjust the lowest
density allowed
20. SJ: Examine higher density on existing imdeveloped land and propose increases where feasible
21. SJ: High rises in downtown as tall as FAA limits will allow - concentrated in downtown
22. SJ: Allow vertical mixed use residential by right in commercial(neighborhood retail and
ofSce) and industrial zoning districts. Sacramento was referenced as an example for
neighborhood retail.
23. SJ: Enable and encourage high density on corporate campuses. Revise design guidelines to
retrofit existing industrial parks to allow housing to be built on parking lots.
24. SJ: Enable and encourage mixed use, high density development(vertical or horizontal) on
industrial lands in North San Jose or other locations as well where it may he desirable
including North Coyote Valley and Monterey Corridor.
25. SJ: Encourage mixed use development in air rights. Examples included over churches, non
profit offices.
26. SJ: Ejq)and existing alternative use policy to allow affordable housing in office zoning districts
27. SJ: Review the City's LOS policy to consider a lower transportation level ofservice for
housing projects in Rincon, Downtown or other areas determined to be appropriate
Funding
1. General obligation bond/short-term .250 sales tax for affordable housing pursued as a
potential source offimding
2. Prioritize limited resources toward the neediest populations first.
3. People most effected need to be helped first: focus on homelessness, low-income housing,
then affordable housing.
4. Allocate a higher percentage ofRedevelopment fimds toward housing (possibly through state
legislation).
5. Lobby to get Federal and State Fxmds for affordable housing
6. Revenue sharing among localjurisdiction for housing, fiscalization ofland use - possibly
pursue state legislation
7. Work with Fannie Mae Freddie Mac and other agencies to create equity fimd to support
housing -leverage more dollars ^ location and energy efficient mortgages, buy downs of
interest rates
8. Require generators oflarge numbers ofjobs(100 or 200 or more) would be required to pay
into a housing assistance fimd.-Housing Intact Fee.
9. SJ: A higher percentage ofredevelopment housing fimds to extremely low-income housing
(affordable to those making 30% or below ofmedian income).
10. SJ: Increase Housing Department's predeyelopment pool fimding
11. SJ: Use reserve fimd to pay for building permit staffto allow for staffadds more quickly
12. SJ: Funding mechanisms needed to ensure that there are adequate staffresources in Planning
AND Building to handle the workload. May or not be cost recovery based and would need
General fimd support
13. SJ: Looking at other sources ofrevenue to put into housing. For example: Taking a
percentage ofsurplus over costs in an existing tax and putting that $$ into the Housing
Department for low-end affordable housing. Have fimds fi-om new industrial development to
State returned to locals for housing development.
14. SJ: Set aside 50% ofRDA's new increment fimds for affordable housing
15. SJ: Consider opportunities for infi'astructure (parks, library, schools, etc.) amenities in
industrial areas that would make it more residential fi-iendly.
16. SJ: Direct Housing Department staffto make changes to speed up process for affordable
housing loans(develop more flexibility in guidelines, create boilerplate loan documents, create
easier process for pre-development pool fimding,reduce time between approval and checkcutting)
PoKcy
1. Enact legislation to address construction defect litigation issue, reduce time limit.
2. Initiate state legislation to revise CEQA rules with state to simplify review for housing
3. Research: Reanalyze assiunption ofhousing not paying its fair share oftaxes - not a drain on
City budgets
4. SJ: Enforce existing City policy that not less than 10% ofall units in multi-femily bond
financed rental housing projects be first offered to tenants with Section 8 vouchers
Land
1. Accelerate availability ofpublicly owned land for housing development(VTA as example).
2. Evaluate and make surplus and/or underutilized public lands available.
3. Investigate a non-profit land trust to acquire land and make it available for affordable housing,
possibly use Housing Trust.
4. Housing should be part ofinfrastructure - Transit projects should buy land for housing
adjacent
5. SJ: Utilize RDA to assemble land
6. SJ: City to take a proactive role in brownfield development to clean up sites and make them
available for housing
7. Reuse underutilized retail properties for housing
8. Rezone underutilized industrial and commercial land for housing
Rent Control/Tenants' Rights
^
1. Ejq)and and update San Jose's rent control ordinance and extend provisions to other cities.
2. SJ: Add just cause eviction ordinance
3. Develop and publish a list ofthe landlords that are engaging in the most questionable of
practices(rent increases, evictions, etc.)to show officials.
Corporate Involvement
1. Housing Impact Fee(see Fxmding #8)
2. Encourage ongoing investment into Housing Trust.
3. Encomage development ofhousing for employees on their campuses
4. Create housing above office units
5. Corporations should join proponents ofbond issues for housing.
Community Involvement
1. Invest in a public education campaign toTengage public, corporate leaders, elected officials.
2. Build a grassroots network and organization with involved people as fest as possible.
3. Our constituencies must be sufficiently educated in public budgeting and land use.
4. Engage our constituents in a new level that makes them part ofproblem-solving and strategy.
5. Community must support elected officials who show leadership (i.e. for higher density)
6. Develop a con^rehensive graph/map that describes the dimensions and the interactions
between issues(housing costs, wages,transportation/long commutes, health, economic
vitality, etc.).
Living Wage/Low income supports
1. Raise the income levels ofwage earners. Pay raises make a big difference in housing
affordability.
2. Look at con^rehensive supports for low-income individuals (i.e. to fimd assisted living)
Planning Process Changes
1. Inclement the smart permit process ofSVMG
'
2. SJ: Combine PD zoning, permit and Tentative map process - have it heard at Director Hearing
and appealable to Council
,
3. SJ: Planning and Building department needs to be streamlined - cut by 25% timelines. Oregon
model for streamline process was mentioned.
4. SJ: Promote concurrent processing ofGP,PD zoning,PD permit and tentative maps possibly with some threshold
5. SJ:Put in place Master EIR's at GP amendment stage for purpose ofexpediting zonings and
permits
6. SJ: Alter building codes and review process (standardize specs) where feasible to
accommodate Manufactured(modular and mobile) homes
7. SJ: Review City's plans for parking, setback, street widths, open space requirements, elevation
issues to make sure they are compatible with density and have attractive design
8. SJ: San Jose specific recommendations introduced by San Jose Mayor's Housing Production
Team -Fall 2000
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Retreat Report
Wednesday, July 18,2001 •3-8PM•505 W.Julian St.•Sari Jose
Presentations of Work Groups
Outcome: Research work groups in phase 1 made presentation to the full committee on their key
findings to delineate the needs and major barriers to housing.
Needs
Despite the lack ofeconomic data from the 2000 Census,the projected need countywide for
Housing units affordable to very low-income(VLI)and extremely low-income(ELI)households
should be around to 82,000. This does not include the need for units affordable to low and
moderate income households. The Work Group is continuing work on these need projections
based on income and projections ofspecial needs documented py the Consolidated plans ofcities
throughout the County. Core foctors identified as contributing to housing need include 1)Lack of
Production[due to high land co^s.Prop. 13 tax disincentives, and reduced state and federal
funding.]; 2)Inability to Preserve Affordable Units [due to gentiification, and HUD financed units
applying to be converted to market rate]; 3)Rapid Job Growth [at both ends ofthe wage
spectrum creating higher process and more intense cori5)etition]; 4)Immigration[both domestic
and foreign, which has fiieled our economic e:spansion and created diverse needs];5)NIMBYism
Qjublic resistance to affordable and higher density housing]; 6)Lack ofRenter Protections; 7)
TraflSc [congestion and increased commute times]; 8)Utility costs; 9)Service Workers being
squeezed out ofMarket; 10)Persistent homelessness; 11)Overctowding; 12)Digital Divide [local
youth are unprepared to meet the employment needs oflocal industry].
Interrelationship with Other Regional Issues
The committee Ideiitified sk major subject areas that require coordination with any housing
planning: 1)Transportation [transit oriented development,transportation systems to
accommodate larger Bay Area and central coast which feed enq)loyees, incorporating model of
transportation nanagement plans into housing planning]; 2)Cost ofCity Services/Fiscalization of
Land Use [tax structure is perceived to limit ability to absorb more housing,requires regional
incentives and state legislation]; 3)Lack ofCoordiriated Strategy[Cities/County do not have
regional vehicle for inediating these concerns]4)Jobs/Housing Imbalance. The conunittee also
discussed the need for a iimovative modeling system that would be able to present information in
a way that residents and policy makers would be able to understand the scope and context ofthe
problem and alternatives. For exanple, a mapping process would project how the region would
look if we increased density as one policy solution, how much housing actually costs, what would
be the impact on transportation systems and municipal services. Other scenarios that could be
used include the impact ofa massive build out oftransit(including neighboring counties), or what
the region would look like if we did nothing at all.
Housing Broadly Defined
The Housing Work Group sought to identify barriers to adequate levels ofhousing unit
production across the entire spectrum ofhousing needs. They presented a few key facts on supply
and affordability including: projection ofsupply meets only 50-66% ofdemand projected; in 2000
rents increased 26%,and the vacaiicy rate dipped to .06%. The Barriers presented included: 1)
Growth Controls; 2)Regulations: Local, State, Federal; 3)NIMBYism;4)Intensity ofUse;5)
Barriers Continued;6)Construction Defect Liability; 7)Density and Zoning; 8)Lack of
Infrastructure; 9)Job and Housing Imbalance; 10)Development Costs.
Affordable Housing
The Affordable Housing Work Group identified and supported the documentation ofseveral key
barriers to the development ofaffordable housing: 1)Financing Constraints; 2)Regulatory
Guidelines-State; 3)State Assistance Guidelines;4)NIMBYism;5)Development Costs;6)
Limited Varieties ofNew Housing;7)Decreased Federal and State Housing Assistance; 8)
Density/Zoning;9)Land Use; 10)Lack ofIncentives to keep housing affordable (preservation);
11) Speculation. The work group also made process recommendations asking for a calendar of
meetings and liaisons with the other committees ofthe County Housing Task Force and
Supervisor Beall's office. Furthermore, the committee also made 2 recommendations calling for
ongoing subcommittee work to continue exploring 1)the total housing need without relying on
ABAG projections and 2)the Determination ofappropriate subsidy levels for affordable housing.
The RHAP Committee conciured as it coincided with a recommendation from the Needs Work
Group.
Presentation by Supervisor Beall
.
'
Supervisor Beall spote with the committee and answered questions about the context that the
County is operating in and the interest in expanding their role in affordable housing. The
Supervisor indicated that it might make sen^ to use a significant portion ofthe County's
settlement with San Jose's Redevelopment Agency for the puipose ofaffordable housing. His
hope is that the efforts ofthe County Housing Task force
help steer a path for the County's
involvement in affordable housing.
Categorize Barriers/Issues
Outcome: After a review ofthe information presented by the Working groups the committee
grouped the barriers identified in the research phase ofthe process into four categories(finance.
Policy Issues, Community involvement, and Process/Land Use Planning)that will facilitate
focused conversations on strategies.
Finance
Constraints
Development Costs
Costs ofCity Services/FiscaUzation ofLand Use
Speculation
State Assistance Guidelines
Policy Issues
Growth Controls
Housing/Jobs Imbalance
Lack ofa Coordinated Strategy
Lack ofinfrastracture
Construction Defect Litigation
Decreased Federal & State Housing Assistance
Transportation
^
Community Involvement
NIMBYism
Lack ofPolitical Will
Process/Land Use Planning
Density/Zoning
^
Limited Varieties ofNew Housing
Regulatory Guidelines-State
Land Use
Intensification ofUse
Regulation:
Local
State
Federal
Strategv Identification
Outcome: By Starting with the barriers presented earlier, the committee identified as
comprehensive a list ofstrategies for consideration and future discussion in 2 ofthe 4 categories
(Finance/Policy Issues). Strategies were intentionally not debated or explained in great detail.
Finance
Constraints
• Increase State and Federal funding
• Leadership in developing community involvement to put pressure on State & Federal
• Potential local revenue streams:
•
•
•
•
•
Impact fee on large employers
50% ofRDA fimds to housing (state legislation)
General Obligation Bond
Sales tax(.250, temporary or otherwise)
Revenue sharing among localjurisdictions
• Real estate transfer tax
• Incentivize the development ofalternative kinds ofhousing (Le. Manufectured/Mobile, Co
op/Shared Housing)
• Property Tax incentives
Development Costs
• Streamline Permittihg
• Remove the veto power over individual projects exercised by San Jose City Councilmembers
(i.e. zoning by right)
• Provide some mitigating incentives:
• Density bonuses
Waving fees
Reduce land costs
Establish a pendent source offimding for non-profit developers
Costs of City Services/Fiscalization of Land Use
Identify innovative means ofoffsetting the costs ofcity services
Establish Tax laws which make sense(enact state legislation to return more property taxes to
localjurisdictions to cover the costs ofmunicipal services)
Spread city resources across the region(county)
Spread tax allocations on a per capita basis in the covmty (sales tax revenue sharing)
Speculation
Rent Control
Just Cause Eviction
Land banking
Land Trust
Taxes on windfalls
State Assistance Guidelines
Adjustments on high cost areas
Tax credits should be an entitlement
Look at the examples ofother states
Policy Isisues
Growth Controls
• County should take the lead on identifying land that can be developed
• Consider exemptions for affordable housing
• Penalize cities that do not meet their fair share housing assessments(local and state penalties)
• Coxmfy should use its influence with State HCD to hold cities accoimtable for being in
conpliance with their housing elements, (leverage: ifHCD finds that a cities housing element
is out ofcompliance, then their general plan is out ofcompliance and they are restricted firom
doing nearly anything)
Housing/Jobs Imbalance
• Require housing with any commercial/industrial development
• Establish a raoratorium on commercial/industrial development until suf5cient housing is
developed (to meet either the specific development's needs or the wider need)
• Create more living wage jobs
• Reuse/rezone land for housing
• Create more infrastructure/residential amenities in industrial areas for housing
Lack of a Coordinated Strategy
• Coordinate and keep it going
• Reestablish a County Inter-Govemmental Council(all localjurisdictions represented)
Establish a County Department ofHousing
Establish a County HOusii^ Commission
Require alljurisdictions to submit consolidated plans to County Housing Commission for
approval before submission to HUD
Establish a regional Discussion that will develop a common vocabulary on planning and
building issues.
Convene a Housing Summit ofexisting groups
jack of infrastructure
Cities can target infrastructure improvements toward where they want housing (incorporated
into capital improvement plans)
Establish a permanent local revenue source for such in^rovements
Construction Defect Litigation
Lead a region-wide push to lobby for State legislation to correct it.
Work with insurance companies to address the issues.
)ecreased Federal & State Housing Assistance
Educate and outreach to the community to build a housing constituency
Preservation ofAffordable units(HUD financed and otherwise)
Push cities to refiise to deal with firms that are in the conversion business
Establish a non-Profit community land trust
Create a permanent source oflocal financing for land trust and buy outs ofHUD financed
properties
Push for re-instituting HUD programs, new federal legislation
Create incentives for the developers to stay affordable
Property tax rollbacks/adjustments
Re-institute payments for damage to section 8 units(now there are limits that may be too low)
Transportation
Complete and ejq)and Light rail system
Connect to BART
^
^
Make fest passes/eco passes cheaper and more accessible to those living near transit
Increase frequency oftrips
Increase access/connections between transit and housing/jobs
(frequent free/inexpensive shuttles from rail corridors to high density housing clusters and job
centers)
VTA should purchase land for housing
Reuse ofVTA land for Housing (High density and affordable)
Create incentives to building housing near transit (infrastructure improvements, cheaper
finmcing,etc.)
• Increase density
• Transportation Management Plan
Next Steps; Process Alignment
Outcome; The group dii^ussed alternatives for moving forward. The agreed upon strategy was
to hold four strategy sessions for each ofthe barrier/issue grouping over the next 3 weeks. At
each ofthese meetings we will explore, discuss, develop and prioritize the strategies identified.
Because oftime constraints the strategy identification process did not occur for Community
Involvement or Process/Land Use Plann^ Section. That process will take place at the beginning
ofeach ofthose strategy meetings.
• Community Involvement
Thursday, July 26th
• Process/Land Use Planning Tuesday, July 31st
• Public Policy
Tuesday, August 7th
• Finance
Thursday, August 9th
Each meeting will take place at the Housing Authority at 6:30PM.
County of Santa Clara Housing Task Force
Regional Housing Action Plan Committee Report
Strategy General Session -Wednesday, August 15th, 2001
Over the past month committee members have identified, examined, discussed andprioritized
recommendations addressingprimary obstacles toward the development ofhousing infour
strategy discussions grouped under topics ofCommunity Involvement, Process/Planning/Land
Use, Public Policy and Finance. Thatprocess reviewed arid debated over 70 strategies to create
a consensus on thefollowing list ofrecommendations that are consolidated intofour categories:
Legislation, Regional Leadership/Expanded County Role, Zoning/Plannirig/Land Use, and
Finance. Strategies are listed in order ofpriority and top recommendations will be the subject of
an Action Step discussion on August 28thfrom 5-9PM at the Housing Authority[505 W. Julian
St., San Jose]
Present: Chris Block,Poncho Guevara, Alyson Abramov^dtz, Candy Capogrossi, Tracy Chew,
Jung Choi, Betty Feldheym, Amy Glad, Steve GKckman,Ron Johnson,Emma McKeithen,Bill
McWood,Sarah Muller, DuniaNoel, Maria Romero-Aranda, Ben Spero,Paul Stewart, Greg
Tompkins, Suzanne Tobin, Saul& Billie Wachter, Heidi Wolf-Reid, Georgette Wong,.Dan Wu,
Paul Wysocki,
Strategy Recommendations
Finance
1.
Coimty should spearhead a County-wide effort to secure a permanent source oflocal
revenue for affordable housing. The RHAP Committee discussed a myriad ofpossible revenue
streams and by consensus offers the following as suggested sources:
• Use the Coimty's Redevelopment settlement with the City ofSan Jose.
• Support an increase in the percentage ofredevelopment tax-increment is directed toward
affordable housing(f-om 20% to 50%)and direct any settlements with cities toward a
Countywide housing pool.
• Create a Countywide sales-tax revenue pool for affordable housing.
•Support legislation that will create Housing Redevelopment zones where increases in property
tax-incr^ent is hmneled toward affordable housing.
While such a revenue Source should be used to subsidize development ofhousing along the
continuum ofthe County's housing need,the Committee fiirther recommends that a portion be
directed toward a fimd that can support infrastructure improvements in cities to incentivize
development ofaffordable housing and higher denisity housing.
'
[Timeframe: Short/Medium-term; Obstacles Addressed: Financial Constraints, Decreased
State/Federal Housing Assistance, Intensification of Use, Lack ofInfrastructure, Cost ofCity
Services/Fiscalization ofLand Use]
2.
The County should spearhead the development ofa local structure to spread tax
allocations County-wide (sales tax revenues on a per-capita basis for example).
[Timeframe: Medium/Long-term; Obstacles Addressed: Financial Constraints, Cost ofCity
Services/Fiscalization ofLand Use, Housin^Jobs Imbalance]
3.
The County should help establish a non-profit land trust that can purchase land/use
public pareels. Thus,take land acquisition costs out ofthe equation for the development and
preservation ofaffordable housing.
[Timeframe: Short/Medium-term; Obstacles Addressed: Speculation, Financial Constraints]
Regional Leadership/Expanded County Role
1.
The County should establish a Department ofHousing to both consolidate and expand the
County's role in the development ofaffordable housing Coimtywide. To tnaximize the impact of
enhanced Coimty activity in housing,the County should establish a County Commission on
Housing that would include representatives firom all localjurisdictions. The Commission would
not only oversee the fimctions ofa Housing Department, but would foster a collective dialogue on
issues ofhousing and provide a vehicle for regional action. Among the activities such an interGovemmental Commission should consider is educating other elected officials on the in:q)ortance
ofaffordable housing'development in their citieSj spearheading regional planning processes that
will mitigate the housing/jobs imbalance, and commentii^ on the housing elements ofindividual
cities to the State HCD.
[Timeframe: Short-term; Obstacles Addressed: Lack ofa Coordinated Strategy, Density/Zoning,
Lack ofPolitical Will]
2.
The County should take the lead in the development ofaffordable housing on publicly
owned land(County, State, City, VTA -owned parcels, etc.) and should change land use policies
on the l^d under its jurisdiction to incentivize the development ofaffordable housing and higher
density housing. Recognizing this is a dramatic departure fi-om current practice, the County
should lead by exan5)le.
[Timeframe:Short/Medium-term; Obstacles Addressed: Growth Controls, Lac^ ofa Coordinated Strategy]
3.
The County should invest significant resources in a Communications Strategy that will
enhance community support for the development ofaffordable housing and greater public
investment in housing as part ofthe infi-astructure (press relations, community outreach,
development ofcollaterals that will engage different constituencies in addressing the housing
crisis, etc.).
[Timeframe: Short-term; Obstacles Addressed: Lack ofPolitical Will, NIMBYism]
Other Key Recommendations:
•
In view ofthe fiict that rent burden has increased on middle- and low-income families, the
Coimty and local cities should study how they can provide rent relief. The County should take a
leadership role in this effort and actively advance the inplementation ofthe identified strategies.
[Timeframe: Short-term; Obstacles Addressed: Speculation, Lack ofPolitical Will]
•
The Cotmty should sponsor a design competition for architects to craft new forms of
housing (for example: work with private industry to come up with new types ofworker housing).
Awards could include grants, or publishing a book ofgood ideas.
[Timeframe: Short-term; Obstacle Addressed: Limited Varieties ofNew Housing]
•.
Create community processes/structures that will involve local residents and elected
leaders in neighborhood planning efforts to include affordable housing.
[Timeframe: Medium-term; Obstacle Addressed: Intensification of Use, NIMBYismJ
•
The County should support and strengthen efforts to create more living wage jobs.
[Timeframe: Short/Medium-term; Obstacles Addressed: Housing/Jobs Imbalance, Speculation]
•
The VTA should purchase land and reuse surplus parcels for housing especially high
density and affordable units.
[Timeframe: Short-term; Obstacles Addressed: Transportation, Lack ofPolitical Will]
Legislation
1.
The Coimty should take a lead role in advocating for reform ofthe property tax allocation
structure created by Proposition 13. The current system is widely perceived to have created
disincentives toward the development ofmore housing by cities.
[Timeframe: Long-term; Obstacles Addressed: Cost ofCity Services/Fiscalization ofLand Use]
2.
The County should take a leadership role in expanding Federal housing assistance by
rallying community support for the National Housing Trust Legislation and actively organizing for
similar support from other Bay Area communities. Furthermore,the County should spearhead this
effort by preparing an analysis ofexisting federal programs and how they work or do not work
here based on the cost ofhousing and developable land in our region.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal Housing
Assistance, Financial Constraints, Lack ofPolitical Will]
3.
The County should take a leadership role in expanding State housing assistance by rallying
community support for greater levels offunding for housing arid to feirly compensate regions with
higher costs ofliving. In addition to analyzing the efBcacy ofFederal programs given the disparate
costs here,the County should also prepare an analysis ofexisting ^te programs.
[Timeframe: Short-Medium term; Obstacles Addressed: Decreased State and Federal Housing
Assistance, Financial Constraints]
Other Key Recommendations:
•
The County should support statewide legislation that will help enforce Housing Elements
developed by Cities. While corisensus was not reached by the RHAP Committee on the form of
sanctions that could be levied against cities, withhold fimdihg from cities out ofcompliance was
prioritized as a key tool.
[Timeframe:Short-Medium term; Obstacle Addressed: Weak Regulatory Guidelines]
•
The County should take a lead role in a Bay Area-wide lobbying effort for State
legislation correcting problems with Construction Defect Litigation.
[Timejrame: Short-Medium term; Obstacle Addressed: Construction Defect Litigation]
The Coimty should help introduce state legislation that will permit CEQA (California
Environmental Quality Act)exemptions for affordable housing development.
[Timejrame: Long-term; Obstacles Addressed: Regulation, Growth Controls]
Zoning/Planning/Land Use
1.
The County should lead efforts to increase density countywide using a multi-feceted
strategy; Leading by example by creating an affordable housing exenption to density limits for
housing development; Encouraging opr local political leadership ofto increase density and
affordable housing opportunities through planning and zoning policy discussions and pushing for
updates to General Plans; and creating incentives to higher density /affordable housii^
development through an infrastructure improvement component ofa local housing fimd.
[Timeframe: Medium/Long-term; Obstacles Addressed: Intensification of Use, Density/Zoning
Growth Controls, Land Use Policy]
2.
The County should lead an effort to create incentives to build housing near transit
(infrastructure improvements, cheaper financing, etc.).
[Timeframe: Medium-term; Obstacles Addressed: Transportation, Density/Zoning, Growth
Controls]
3.
At the Planning Department level: Fast track and prioritize affordable housing
development and encourage cities to the same.
[Timeframe: Short-term; Obstacles Addressed: Regulation]
Other Key Recommendations:
•
The County should support requirements for housing to be developed when any
significant commercial/industrial/retain/office development is proposed. By providing leadership
in a regional dialogue(an inter-governmental Housing Commission,for example)the County can
help introduce such policy tools that may help mitigate the impact ofrapid job growth and cjqpand
the conversation to the responsibilities oflocal employers to develop housing.
[Timeframe: Medium/Long-term; Obstacle Addressed: Housing/Jobs Imbalance]
•
The County should advocate and create incentives for mixed-use development in infill and
new communities(e.g. mid Coyote Valley).
[Timeframe: Medium-term; Obstacle Addressed: Land Use Policy]
The County should encourage cites to allow/incentivize secondary("granny") units in
existing residential areas
[Timeframe: Medium-term; Obstacles Addressed: Limited Varieties ofNew Housing,
Density/Zoning]
•
The County should create incentives for residential development m non-residential areas
(rezoning).
fTimeJrame: Medium/Long-term; Obstacle Addressed: Intensification of Use]
SANTA CLARA COUNTY HOUSING TASK FORCE;
SECTION IX
IMPLEMENTATION RECOMMENDATIONS
On August 17,2001,the Housing Task Force Steering Committee niet to discuss the
next steps in the process. The Steering Committee is comprised ofthe Co-Chairs
for each ofthe Working Group Sub-Committees, as well as representatives from
Sup. BealTs office, and the overall Project Manager. The roster(in alphabetical
order)is as follows:
Bonnie Bamburg, Surplus Government Land Co-Chair
Roger Barnes, Public Employees' Group Co-Chair
Chris Block, RHAP Co-Chair
Jean Cohen, Sup-Beall's Office
Poncho Guevarra, RHAP Co-Chair
Caroline Judy, Sup. Beall's Office
Will Lightboume, Special Needs Housing Co-Chair
Frank Motta, Special Needs Housing Group Co-Chair
Alex Sanchez, Surplus Government Land Co-Chair
Kristy Sermersheim, Public Employees' Group Co-Chair
Ray Villareal, Interim Housing Coordinator and Land Trust Group Chair
Paul Wysocki,Project Manager
The Steering Comimttee reviewed the process to date, and discussed the next steps,
including the contents ofthis Status Report. In addition, the Committee discussed
the implementation ofthe overall objectives and recommendations in the following
context.
The Vision articulated by Sup.Beall in February ofthis year has been embraced
wholeheartedly by the Task Force members. Many,ifnot most, ofthe Task Force
membership are people who have spent years, if not decades, in the field of housing.
They are Service Providers, Community Advocates and Activists, Housing
Developers, Financiers, Businesspeople, Members ofthe Faith Community, Labor
Representatives, Government Elected and Appointed Officials, and Other Interested
Parties who have devoted a great deal oftime, energy, money, and hope in the
process Of housing our citizens.
The past 90 days represents an enormous investment ofbrainpower, ideas, and
discussion by people who now have an extraordinary expectation that the
recommendations advanced may lead to significant results. They are also people
who have a great deal ofe5q)erience in group processes, especially in the political
arena. They are well aware that momentum in such work develops slowly, and
requires earnest persistence and follow-up to continue.
With this in mind,the Steering Committee respectfully suggests that they, the
Steering Committee as currently comprised, act as a "Transition Team", overseeing,
as they have been, the continued development of mid- and long-term action steps, as
well overseeing the implementation ofshort-term strategies. There may well be in
the fiiture, a re-organization ofcounty stafiBng around housing. However,that
would be in the fiiture, and a loss of momentum, as well as institutional memory
would result if steps are not taken immediately to continue this work. The Steering
Committee would like to "champion" the continued work.
Some ofthe Steering Committee members are also County employees, and thus
have the requisite knowledge and e^qperience to shepherd the continued process
through the bureaucracy oflocal government. The Steering Committee members are
also well versed in housing issues, and are certainly fiilly aware ofthe content ofthe
recent process.
In addition, many ofthe recommendations would involve other organizations and
institutions that must be consulted and invited to join the process. The process of
the past 90 days was certainly not intended to include discussions with these groups.
Ifthe County is to consider bold action in convening meetings with other
governmental bodies, perhaps through the Inter-Govemment Council, a process
must be prescribed that would allow for that action to begin.
Some ofthe items io consider in additional Steering Committee work might include:
• Additional research into Housing Need, using conq)lete Census and other
data;
• Additional research by an Urban Economist(funded by other sources)into
the affect ofsupply and demand on housing prices and historic housing
subsidy levels.
• Processes by which representatives from other jurisdictions can become
included in this work (State Assemblymember Manny Diaz has, for
example, appointed a Select Committee on Silicon Valley Housing; the
Housing Task Force work could be integrated into the work ofthat
committee);
r
• Policy and Legislative recommendations could be more fully developed
and implemented;
• Mid- and long-term strategies could be more fully discussed and
developed; and,
• Potential County housing stafiBng recommendations.
The Steering Committee Members are also mindful ofthe need for efficiency and
swift operation. They have proposed that such a "Transition" efifdrt be limited to a
one year term; that it be a professionally facilitated process; that specific outcomes
based on the above items be described; that periodic reports to the Board of
supervisors be delivered; that a method ofcommunication to the public be
developed; and that the outcomes be manageable and attainable in the time
prescribed.
We,the members ofthe Santa Clara County Housing Task Force Steering
Committee wish to express our gratitude to the Board of Supervisors and its Chair,
Sup. Beall, for allowing us to participate in this historic and veiy important process.
We have learned a great deal fi*om each other, as well as about ourselves as
dedicated citizens who want to make a difference in our community. We hope that
this Work will find its way into sustained and significant results, and that the future
ofhousing opportunities in Santa Clara County becomes brighter for all ofour
residents.
Respectfully submitted.
The Santa Clara County Housing Task Force Steering Committee
_
Document
In depth Housing Task Force report.
Initiative
Collection
James T. Beall, Jr.
Content Type
Report
Resource Type
Document
Date
11/27/2001
District
District 4
Language
English
Rights
No Copyright: http://rightsstatements.org/vocab/NoC-US/1.0/